Japanese Nippon Steel seeks Biden's approval for US Steel acquisition

Japanese Nippon Steel has submitted a fresh proposal to the White House regarding the acquisition of US Steel, seeking approval from President Joe Biden.

The proposal includes granting the US government a veto power over any reduction in US Steel's production capacity, Caliber.Az reports via foreign media.

Nippon Steel is said to have offered a 10-year commitment not to reduce production at US Steel's plants in states like Pennsylvania, Indiana, and Alabama without the approval of a panel headed by the Treasury Department. The Committee on Foreign Investment in the United States (CFIUS) was unable to reach a consensus on whether Nippon Steel's acquisition of US Steel poses a national security risk to the US, leading to the White House taking over the decision-making process on the $14.9 billion deal.

President Biden faces a deadline in early January for a final ruling, though he has criticized the transaction for months, aligning with a vocal group of US leaders who oppose it, including President-elect Donald Trump and incoming Vice President JD Vance. The deal became a contentious issue in the 2024 US presidential race, particularly in Pennsylvania, a crucial swing state, where union leaders from the United Steelworkers strongly objected to the acquisition.

Despite hoping for a more favorable outcome post-election, Nippon Steel has seen little indication that the political climate has shifted. While Biden has publicly opposed the deal, a recent Washington Post report reveals that many of his advisers support it. The president may approve the acquisition with certain conditions, such as preserving US jobs, the report added. The resolution of these details could delay a final decision until after Inauguration Day on January 20. Nippon Steel has yet to comment on the matter.

The new proposal from Nippon Steel reinforces its commitment to avoid layoffs or closures at unionized facilities for the duration of the current union contract, which expires in September 2026, according to the report. Previous reports from US media have suggested that blocking the deal could lead to legal action from the steel companies. Additionally, there are concerns about the potential diplomatic consequences of scuttling a deal backed by Japan, a key US ally.

Nippon Steel is the only manufacturer of railway steel wheels and axles in Japan. This unit's major products are railway rolling stock components and forged crankshafts for automobiles. The unit has two manufacturing bases for railway wheels and axles, and four bases for crankshafts in the world.

US Steel company produces and sells steel products, including flat-rolled and tubular products for customers in industries across automotive, construction, consumer, electrical, industrial equipment, distribution, and energy. Operations also include iron ore and coke production facilities.

By Naila Huseynova