By Jordan Fabian, Josh Wingrove and Joe Deaux
President Joe Biden said United States Steel Corp. should retain American ownership, coming out against a takeover by Japan’s Nippon Steel Corp. despite the risk of upsetting a key ally.
US Steel shares retreated in early trading, after plunging 13% on Wednesday when news first broke that Biden would express concern about the deal. The shares are now trading at levels last seen before the Nippon deal was announced in December, suggesting investors are increasingly skeptical about its chances of success amid an ongoing federal review.
“US Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated,” Biden said in a statement. “It is important that we maintain strong American steel companies powered by American steel workers. I told our steel workers I have their backs, and I meant it.”
Biden’s statement marks a rare presidential intervention in a transaction that outside an election year would have drawn less public scrutiny. Despite its storied history, US Steel’s role in the economy has diminished over several decades, a period during which producers in Asia have risen to dominate the global steel market. And while Nippon Steel’s proposed $14.1 billion acquisition targets an iconic business name, a takeover in the US commodities industry by a company based in a friendly country is hardly unusual.
Biden was silent on the pending review of the deal by the Committee on Foreign Investment in the United States, or CFIUS, and stopped short of an outright pledge to block it. CFIUS is led by the Treasury Department, and has the power to approve, block or amend the deal on national