U.S. Steel and Nippon Steel have announced they are filing joint lawsuits against the U.S. government and others following President Biden’s move to block the deal. FOX Business’ Lydia Hu with more.
The CEO of U.S. Steel blamed President Biden for failing the United States and emboldening foreign adversaries after his administration blocked the proposed $14 billion acquisition of U.S. Steel by Japan-based firm Nippon Steel.
U.S. Steel CEO David Burritt told Fox Business correspondent Lydia Hu in an interview Monday that Biden demonstrated to the global community that the U.S. has no regard for the rule of law with his handling of the now-defunct deal.
“We did everything right as a company with Nippon,” Burritt said. “We did everything right. The government failed us. They failed because they didn’t follow the process. And we’re going to right that wrong. They failed our workers. They failed our communities. They failed our country. They failed our best ally in Asia. And they’ve emboldened China by not following the rule of law.”
BIDEN OFFICIALLY BLOCKS NIPPON’S TAKEOVER OF US STEEL
President Joe Biden blocked Nippon Steel Corp.’s $14.1 billion takeover of United States Steel Corp. (Justin Merriman/Bloomberg via Getty Images / Getty Images)
“CFIUS [The Committee on Foreign Investment in the United States] is supposed to be robust and confidential, and we find it was neither robust nor confidential,” Burritt continued. “And unfortunately, the President of the United States shamefully, shamefully tainted the CFIUS process from the very beginning. We respected the process, and that was a mistake that we made. We are owed due process, and it sends a terrible message to our workers and a terrible message to our best allies around the world that our country does not respect the rule of law.”
Prior to blocking it, Biden expressed opposition to the deal, arguing that U.S. Steel should remain an American-owned and American-operated firm. The Biden-Harris administration’s Justice Department investigated the deal on antitrust grounds, while the Committee on Foreign Investment in the U.S. (CFIUS) probed the national security implications of the deal.
His decision to block it came shortly after Burritt warned publicly that if the firm’s acquisition fell through, the company would likely be forced to shutter steel mills in Pennsylvania’s Monongahela Valley and Gary, Indiana, that had been slated to receive a $3 billion upgrade with cash infused by Nippon following the completion of the sale. The investment, which hinged on the deal going through, was necessary for the company to remain economically competitive with international rivals and to keep workers employed, he said.
“We wouldn’t do that if the deal falls through,” Burritt told The Wall Street Journal in an interview at the time. “I don’t have the money.”
Burritt also signaled that if the Mon Valley Works closes, the company would likely look to move its headquarters out of Pittsburgh to a location in the South, where an increasingly large share of the company’s production has moved.
A US flag flies from a light post in front of a Wheeling-Nippon Steel facility in Follansbee, West Virginia, US, on Friday, March 15, 2024. Nippon Steel Corp. sought to complete its $14.1 billion acquisition of United States Steel Corp., even after P (Photographer: Justin Merriman/Bloomberg via Getty Images / Getty Images)
Nippon Steel and U.S. Steel scolded Biden’s decision in a joint statement released Friday, writing that the president’s involvement “reflects a clear violation of due process and the law.” The firms also accused the process of having been “manipulated to advance Biden’s political agenda.”
The statement also dismissed Biden’s claims of national security concerns and announced that U.S. Steel plans to take legal action against the government to “protect our legal rights.”
“The President’s statement and Order do not present any credible evidence of a national security issue, making clear that this was a political decision. Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights,” they wrote.
“We will never give up on pursuing business in the U.S. for the benefit of the U.S. domestic stakeholders,” the statement continues. “We continue to believe that a partnership between Nippon Steel and U. S. Steel is the best way to ensure that U. S. Steel, and particularly its USW-represented facilities, will be able to compete and thrive well into the future – and we will work closely with stakeholders, including government officials from Japan and allies and partners in the U.S., to take all appropriate action to protect our legal rights and secure that future.”
Former Secretary of State Mike Pompeo, who Nippon Steel hired last year to advise on the deal, expressed his support for the acquisition prior to Biden’s decision to block it. He, too, blamed the CFIUS’s alleged politicization for tanking the deal.
“Unfortunately, that committee that was responsible for evaluating national security risks became politicized,” Pompeo told “Kudlow.” “Instead of just looking at national security risks, of course there’s none — it’s an ally, Japan, that’s going to invest in America, make steel here in America, build in America.”
Mike Pompeo, U.S. Secretary of State (2018-2021) and Director, Central Intelligence Agency (2017-2018) speaks onstage during Fortune’s Global Forum in New York City on America and the new global order. (Jemal Countess/Getty Images for Fortune Media / Getty Images)
Pompeo urged the incoming Trump administration, which has also expressed opposition to the deal, to “reconsider for the workers of Pennsylvania, who nearly all favor this transaction moving forward, everybody but the senior union liberal leadership…
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“It’s good for the community,” he said, “and the Mon Valley.”
U.S. Steel shareholders voted to approve the $14.9 billion deal with Nippon Steel in April, with 98% of the shareholders voting in support of the deal.
Fox Business’ Eric Revell contributed to this report.
