Nippon Steel, US Steel jointly file lawsuit against White House after Biden stalls deal

Nippon Steel and US Steel say they have jointly filed a lawsuit against the US government in response to US President Joe Biden blocking the Japanese company’s takeover bid of US Steel.

The companies have asked the US court to set aside the review process by the Committee on Foreign Investment in the United States, or CFIUS, and Biden’s blocking order.

They say the interference violates Constitutional guarantee of due process and other procedural requirements. They also claim there was unlawful political influence.

Earlier, Nippon Steel held a news conference on Tuesday last week to weigh options after US President Joe Biden blocked the Japanese company’s takeover of US Steel. Both companies called the move to derail the deal a “political decision” that violates the law.

Nippon Steel President Imai Tadashi said in his New Year’s address on Monday that the company remains determined to expand in the US. He added that Nippon Steel will take all appropriate action to protect its legal rights.

Both steelmakers agreed on the takeover in December 2023. The Committee on Foreign Investment in the United States reviewed the deal, but failed to reach a consensus.

It was then referred to Biden, who blocked the acquisition on Friday, citing national security concerns.

Japan’s Economy, Trade and Industry Minister Muto Yoji said the decision is a concern for other Japanese industries considering further investment in the US.

He said: “I believe this deal would be beneficial for both countries, and I understand workers of US Steel have voiced support for it. The Biden administration’s decision citing national security concerns is very disappointing and difficult to understand.”

Muto added that Tokyo has asked Washington to further explain the reasoning behind its decision.

Biden’s order requires the steelmakers to take all necessary steps to “fully and permanently abandon” their planned transaction by February 2.