Nippon Steel and U.S. Steel filed a lawsuit Monday alleging President Joe Biden unlawfully blocked Nippon’s $14.9 billion purchase of the American steel maker.
Biden on Friday rejected Japan-based Nippon Steel’s takeover bid of the Pittsburgh-based steel manufacturer, citing national security concerns.
“As I have said many times, steel production — and the steel workers who produce it — are the backbone of our nation,” Biden said in a news release. “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. Without domestic steel production and domestic steel workers, our nation is less strong and less secure.”
The lawsuit, filed in the U.S. Court of Appeals for the District of Columbia Circuit, argues Biden’s action violated the companies’ right to a fair review.
The suit seeks monetary damages and an injunction against the defendants from “engaging in collusive and anti-competitive behavior.”
Nippon Steel is scheduled to hold a news conference on Tuesday.
In a joint statement released Friday, U.S. Steel and Nippon Steel blasted Biden’s action.
“We are dismayed by President Biden’s decision to block Nippon Steel’s acquisition of U. S. Steel, which reflects a clear violation of due process and the law governing the Committee on Foreign Investment in the United States,” the companies said. “Instead of abiding by the law, the process was manipulated to advance President Biden’s political agenda. 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. We remain confident that the transaction is the best path forward to secure the future of U.S. Steel — and we will vigorously defend our rights to achieve this objective.”
U.S. Steel (NYSE: X) was founded in 1901. The company produces and sells steel products for customers in industries such as automotive, construction, consumer, electrical, industrial equipment, distribution and energy.
Once the world’s largest corporation, U.S. Steel was the world’s 27th-largest steelmaker in 2023, according to the World Steel Association.
The company currently has 21,803 global employees and over 20 facilities and offices throughout the U.S. and Europe.
Nippon Steel is the largest steel company in Japan and fourth largest in the world.
The nearly $15 billion deal was first announced in December 2023. The Nippon deal came after a bidding war by Ohio-based competitor Cleveland-Cliffs Inc.
Officials with the United Steelworkers (USW) union said they favor the company’s purchase by Cleveland-Cliffs instead of Nippon Steel.
The USW represents 850,000 workers employed in metals, mining, pulp and paper, rubber, chemicals, glass, auto supply, and energy-producing industries.
“The USW welcomes President Biden’s decision to block the U.S. Steel-Nippon deal. We have no doubt that it’s the right move for our members and our national security,” USW President David McCall said in a news release. “Nippon has proven itself to be a serial trade cheater that for decades worked to undermine our domestic industry by dumping its products into our market. Allowing it to purchase U.S. Steel would have offered it the opportunity to further destabilize our trade system from within and in the process, compromise our ability to meet our own national security and critical infrastructure needs.”