The White House is keeping a close eye on the $14.1 billion acquisition of United States Steel Corporation (X) by Japanese steelmaker Nippon Steel (NPSCY), looking for signs that the acquisition could affect the jobs of US steelworkers, particularly in the state of Pennsylvania, as well as “…national security and supply chain reliability.” National Economic Advisor Lael Brainard notes that “this administration will be ready to look carefully at the findings of any such investigation and to act if appropriate.”
Yahoo Finance’s Seana Smith and Brad Smith discuss the White House’s response to the acquisition and its potential impact. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
SEANA SMITH: The White House closely watching the $14.1 billion deal from Japan’s Nippon Steel to acquire US Steel, saying that it deserves quote, “serious scrutiny.” Now, in a statement national economic advisor Lael Brainard saying that, quote, “This administration will be ready to look carefully at the findings of any such investigation and to act if appropriate.” And Brad, this is coming ahead of the 2024 election, which I think says a lot just in terms of the scrutiny, the potential regulatory pressure that this deal could face because President Biden, the Biden administration certainly feeling the pressure from some of these swing states, the battleground states. And in particular, the state of Pennsylvania, two senators there writing a letter to Janet Yellen saying that this deal should be killed because of the impact that it could have on workers within that state alone. You got to think that this is a point that is going to be heavily debated and something that’s going to carry over as we look ahead into next year for the first several months of next year.
BRAD SMITH: Right, I imagine Treasury Secretary Yellen receives that letter and goes, guys, what do you want me to do? I’m in the Treasury at the end of the day. But perhaps there is some sway, major sway that she has within the era of Biden.
And here’s what was said within that note from Lael Brainard as well. This looks like the type of transaction that the interagency committee on Foreign Investment, Congress empowered and the Biden administration strengthen, is set up to carefully investigate because ultimately they believe the purchase of the American-owned company US Steel by a foreign entity even from a close ally appears to deserve serious scrutiny in terms of the potential impact. And here’s what they cited, national security, supply chain reliability. So those two major call outs from the administration. And this deal is set for anything but just smooth sailing to the finish line.
SEANA SMITH: Yeah, certainly. And it’s also important to point out that this deal, it would create the second largest steel company here in the world. So we talk about the impact that it’s going to have on the industry not only here in the US. Obviously, the fact that it’s such a massive global player, the global implications are also in focus.
