Image Credits : Freedom Beacon
Nippon Steel Corp. and U.S. Steel Corp. have jointly sent a letter to U.S. President Joe Biden, appealing for his approval of their proposed $15 billion merger deal. The letter, dated September 10, 2024, was signed by Nippon Steel’s CEO, Eiji Hashimoto, and U.S. Steel’s CEO, David Burritt, as both companies face increasing resistance from Washington over national security concerns. Reports suggest the Biden administration is preparing to block the acquisition, citing potential risks to critical sectors reliant on steel production, such as infrastructure and defence.
The proposed deal has stirred controversy in political and industry circles. Steel remains an essential component in critical industries, and the CFIUS fears foreign ownership could disrupt national projects. The committee voiced these concerns in an August 31 letter, stating that the acquisition could compromise the supply chain for vital sectors like transportation, construction, and agriculture.
Adding to the opposition, both the Democratic and Republican parties have criticized the deal. Democratic presidential nominee Kamala Harris and her Republican rival Donald Trump have openly opposed the acquisition. Both candidates are vying for support in Pennsylvania, a key battleground state and home to U.S. Steel’s headquarters. The United Steelworkers Union has also spoken out against the deal, concerned about potential job losses and foreign control over the nation’s steel production.
Nippon Steel and U.S. Steel in their letter argued that the merger would benefit both nations by strengthening their economic partnership. The CEOs emphasized that Japanese ownership would enhance U.S. steel production rather than compromise it, positioning the combined entity to better compete in the global market. The deal, they argued, would ensure the future viability of U.S. Steel, securing jobs and fostering innovation.
Nippon Steel has also garnered support from U.S. business groups, which have raised concerns that the national security review could be swayed by political interests rather than an objective assessment of the merger’s potential benefits.