Nippon Steel to sue U.S. gov't over decision to block acquisition of U.S. Steel

Go on, stick it to Trump!

Makes sense. Get some Trump paw prints on this as well.

Good luck to Nippon Steel.

It sure does seem like a purely political decision by the President (and incoming President) as argued in this lawsuit.

Should be suing the investment bankers who pitched the deal as a little due diligence would have flagged this as a massive antitrust issue. No government would allow the largest company in such nationally strategic industry to fall in foreign hands.

Look at METI blocking the potential acquisition of 711 convenience store.

It’s pretty embarrassing for Nippon Steel as it’s going to have folk over millions of dollars even as the deal fall thought, but wasting more money on lawyers ain’t going save face.

It will take years,beside you have to get the government permission to sue them Google How To Sue The US Government

YankeeX, very good point comparing the Canadian deal to take over 7and I holdings and it being classified as a national risk to this deal. And as you said, taking over any company with a name like US steel at this time was wrought with problems.

These next 4 years are going to be tough for many countries but especially Japan, Trump will force them to invest and build factories in the US, but they won't be able to buy or take over almost anything.

Japan throwing it's toys from the cot when they don't get their own way again.

Can't believe that Trump hasn't already had more red hats made with the phrase "Stop the Steel" and started flogging them to the faithful.

Why not just leave the decision to the next administration if you have less than two weeks of your term left? Biden is incapable of deciding anything at this stage so this is once again the handwork of his handlers who have made a mess of pretty much everything. Nice parting gift to Japan, a staunch ally, especially citing ‘national security concerns’ as the reason for the deal block.

Why not just leave the decision to the next administration 

Because the next administration will be an absolute basket case of incompetence as it was the first time around.

Better to make big decisions before the billionaire globalists take over.

Just give up already, Nippon Steel. Any USA Imperial President can wave the national security banner and get what he/she wants. The USA surrounded by oceans on 2 sides and friendly (enough) countries on both land borders apparently is so paranoid that it sees threats on every continent not named North America. I take that back all continents including North America.

Makes sense. Get some Trump paw prints on this as well.

Joe is the one that blocked it so you already lost any rights to cry about it.

These next 4 years are going to be tough for many countries but especially Japan, Trump will force them to invest and build factories in the US,

the u.s. has lost a lot of manufacturing knowhow.

there’s nothing corporations hate more than employees.

it’ll be cheaper to still import than spend money on facilities and people.

the last time we went through this with trump, statistically zero factories were built to replace imported goods. they sourced from alternative counties with lower tariffs.

trump still imports all of his tacky merch (guitars, watches, hats, trump flags, etc.) from china. including almost everything in the hotels he licenses his name to.

vice president musk got neck deep in congressional funding for one purpose, to have legislation restricting investment in china deleted, since he invests heavily in china. plus killing provisions that would require tesla to report accidents caused by self driving software.

if you think oligarchs act in the internet of the country or the people, you are sadly naive.

Ricky Kaminski13Today 08:23 am JST

Why not just leave the decision to the next administration

There was a deadline for the president to chime in.

"The decision on whether to let the deal proceed was referred to Biden on Dec. 23 after the Committee on Foreign Investment in the United States failed to reach a consensus, said U.S. Steel.

Biden had 15 days to approve or block the deal after the CFIUS evaluation reached his desk, which prompted Nippon Steel to extend the transaction’s deadline to the first quarter of 2025 from the third or fourth quarter of 2024.

The CFIUS was concerned that, following the acquisition, Nippon Steel could cut the production capacity of U.S. Steel, which would pose a risk to the national security of the United States."

This is why Biden made the decision and was not passed on for trump to make. This following link will also explain the White House decision and the red-tape that NIPPON Steel faces in suing the US Government. I'm sure the incoming trump White House will be even more aggressive in preventing this acquisition so seems like a futile act by NIPPON Steel.

https://www.whitehouse.gov/briefing-room/presidential-actions/2025/01/03/order-regarding-the-proposed-acquisition-of-united-states-steel-corporation-by-nippon-steel-corporation/

Should be suing the investment bankers who pitched the deal as a little due diligence would have flagged this as a massive antitrust issue

There is no basis to argue against the merger on the basis of anti trust law since Nippon Steel would be a new entrant to the US market. It is not a merger of two firms that already produce in the US.

No government would allow the largest company in such nationally strategic industry to fall in foreign hands.

US Steel is the 27th largest steel producer globally. In terms of global market share it's nothing. Nippon Steel is number four globally. None of the world's top ten steel producers are American.

Among US steel producers it is number 4, but it's annual revenue is much less than the thee larger competitors.

Nucor Corp. $37.5B

Steel Dynamics Inc. $20.26B

Reliance Steel & Aluminum Co. $16.21B

US Steel $8.81B

Cleveland-Cliffs $7.74B

The remaining nine companies comprising the top 14 US steel producers earn less than $1B in revenue, often only a couple of hundred million per year.

These next 4 years are going to be tough for many countries but especially Japan, Trump will force them to invest and build factories in the US, but they won't be able to buy or take over almost anything.

Only a fool believes that. Many companies will simply leave the US market. For many companies who have plants scaled to produce for a global market, reproducing those facilities for just the US market will not be profitable. Electrolux AB of Sweden and Panasonic have already discontinued many consumer product lines in the US.

For some other firms what will happen is when a model is abandoned for the global market and replaced with something new, the US will get the tooling for the old model that is out of date. That is what auto makers did in South America for decades when Brazil and Argentine restricted sales of imported cars and trucks. Chrysler was making old Dodge Darts in Brazil well into the 1990s using the out of date tooling from the US after the Dart was replaced by the Aspen. It happened in China too where companies like VW were making versions of the Jetta and Passat that had long been discontinued, replaced by newer models in the rest of the world. When VW stopped making those models in Germany they shipped the old tooling off to China.

Would the U.S. reaction have been the same had this been a German or Canadian company?

It would be so much cheaper if they settle out of court and just pay 10% to "the big guy." Using American mercenaries (lawyers) to acquire a horrible bleeding dinosaur with black nails like US Steel is akin to buying a dog with fleas in the Gordon Gecko world. If having a "U.S." or "Nippom" attached to a name causes so much xenophobia and racism, the names should be banned by the governments who think they have the right to control business deals. Guess what box men---They don't. The judge will throw this out because he is on the same payroll as future Mt. Rushmore face man and honest patriot Joe Biden is.

It makes a lot of sense that Japan Steel sues the US government on the merger and acquisition deal. If Japan Steel can't implement the deal, Japan steel would have to pay a lot of penalty money ($565 million) to the US Steel. Both Japan Steel and US Steel have the same penalty agreement of the deal. If the US Steel breaks the deal or can't implement it, US Steel would have to pay the same penalty money to Japan.

Genuine question. What will happen to US steel if this deal fails? Won't they be forced to close factories and lay off workers? Both companies had pledged not to cut jobs and made other concessions in an effort to win support for the deal. They have also offered to fund a workforce training centre - and reportedly give the government the right to veto potential production cuts. But still Biden is unconvinced.

@Claire. The USG will just nationalise it and prop it up with public money as other steel companies are around the world.

Biden doesn't have a political agenda any more and the rules give the President final say. He can legally toss a coin to decide it if he wants.

In most cases, it is a waste of money suing a foreign government in their court. In this case it does seem pointless. Only the lawyers will benefit. Was it perhaps their idea?

Last option is to offer Trump bigly goodies, but even he might not be swayed on this one.

kwattToday 09:44 am JST

It makes a lot of sense that Japan Steel sues the US government on the merger and acquisition deal. If Japan Steel can't implement the deal, Japan steel would have to pay a lot of penalty money ($565 million) to the US Steel. Both Japan Steel and US Steel have the same penalty agreement of the deal. If the US Steel breaks the deal or can't implement it, US Steel would have to pay the same penalty money to Japan.

Why would NIPPON Steel have to pay if it is the decision of the Biden White House? Nippon Steel didn't breech the agreement. I guess it could be argued that US Steel would be more liable as it's government blocked the acquisition.

Should be suing the investment bankers who pitched the deal as a little due diligence would have flagged this as a massive antitrust issue. No government would allow the largest company in such nationally strategic industry to fall in foreign hands.

If that were true then Smithfield Foods (largest pork producer in the US) wouldn't be owned by a Chinese company, T-Mobile and American Waterworks (utilities) wouldn't be owned by a German company (one of which is state owned), Shell Oil by the Netherlands, Nestle USA by the Swiss, and so on. Not to mention that Boston Dynamics is owned by Hyundai.

This is how you encourage outside investment. The owners still have to follow local regulations and are keeping people employed. So the decision is likely to be based on political agenda more than anything else.

The USA is not made in our by the USA.

Read the small print Japan. A US President has total authority to block an acquisition on the grounds of National Security.

Why would NIPPON Steel have to pay if it is the decision of the Biden White House?

The deal is supposed to be between Japan Steel and US Steel. Even if outsider, someone tried to block the deal, the deal is still between Japan Steel and US Steel agreement. Japan Steel can't implement the deal whatever then pays penalty money. If both Steels can't implement the deal after all, they would not pay penalty each other.

Tokyo would never allow a foreign entity to purchase NS.

They are skittish about 7-11 being run by Canadians on "national security" grounds.

Is it possible Japan would sue Russia for they violated Japan - Russia Gas Pipe Line Project dismissed all Japanese companies contracts?

'Biden's order marked the first time an American president has banned a merger and acquisition deal involving a Japanese firm'

That's truly a little strange and maybe also unprecedented?

Here, the market's interests seem to be hindered by politics at the very heart of Western liberalism? And by Democrats? Truly, a little strange.

Good luck with with that nippon steel. Lol

Trade agreements like GATT hand corporations carte blanche to sue governments for lost profits. When such agreements are introduced, they are pitched as creating "free trade" and other nice sounding things, but the reality is very different. So far this has usually played out in the developing world, where governments have found themselves powerless to stop international owners operating mines that flaut environmental regulations, and the like. I would be surprised if this does not create scope for the same thing to happen in advanced countries too.

As a whole, it is increasingly fanciful to think the US government still stands above corporate power and can take decisions to the detriment of corporations. It would be just desserts if the same legislation they were eager to introduce to exploit the developing world comes back to affect them.

This is just another example that USA is an autocratic system . A democratic system would analyse the good and the bad of the deal. It is bad it was stated because it is "critical for resilient supply chains.”

Yeah, Nah this statement is not even a good go at spinning the BS, Like I have never seen Japan stating we are holding back importing Car or Tech or anything to the USA even after the kick in the guts Japan received after the Plaza accord, did Japan retaliate. No. This is pure USA neocon fear-mongering no doubt push by Nuland neocon faction. Legal action is the only option Nippon Steel shareholders should be demanding. But I don't hold out hopes anything would develop from legal action. No in a autocratic system the USA is.

The "security" issue is pure nonsense. The US Navy already has Japanese shipyards repairing and maintaining USN ships, and talks are underway for full construction in Japan.

In the case of Biden, he's playing it the way Dems have always done. The US tax payers wil be subsidising and assisting US Steel survive in a losing game, with China already holding 40% of the global steel industry. Or, the Dems want to see US Steel going into a collapse crisis during the upcoming Trump term so they can better their 2028 shot.

With Trump, it could easily be a negotiating tactic to get more ad better terms out of it.

With Both US Steel and Nippon Steel prepared to go forward, only an idiot or someone with an ulterior motive would stop this sale without proposing an an alternative solution. Otherwise it's casting a vote for the death of US Steel as a functioning entity.

I don't see any US investors sttepping in to save US Steel, and I don't see the US Govt "nationalizing" US Steel in non-war time.

I think US Steel AND Nippon Steel are right to sue over this obviously political decision.

If and when China becomes the most powerful nation in the world it won't be simply because of their aggressiveness and determination. It will also be because of American stupidity and short sightedness. The US is no longer a Democracy but has become an Idiocracy.

Much ado about nothing. Nippon steel will stand to lose at least $800 million pursuing this straw deal that even Don Quixote wouldn’t order Sancho Panzo to saddle the mule to pursue this illusory quest.

I agree what is fair is fair it was a contracted bid arrangement. However, whenever this amount of bucks involved it attracts so many who want a slice of the pie, be the pie baked steamed or frozen. get the courts rolling, do any of us know who has already added which ingredients inside the pastry. all greedy peoples love pies.

Let it fail.

Genuine question. What will happen to US steel if this deal fails? Won't they be forced to close factories and lay off workers? Both companies had pledged not to cut jobs and made other concessions in an effort to win support for the deal. They have also offered to fund a workforce training centre - and reportedly give the government the right to veto potential production cuts. But still Biden is unconvinced.

US Steel is circling the drain. They own a couple of non-union electric mini-mills in the south that operate profitably they would probably keep but the big old blast furnaces in Pittsburg and their headquarters also in Pittsburg would be closed and the employees fired.

A pyrrhic victory for the Steelworkers Union.

and talks are underway for full construction in Japan.

No, not true. Congress would have to change US law to allow the US Navy to procure new ships from foreign shipyards. The US Navy is only looking at using Japanese commercial shipyards for overhauls and maintenance. They have been using Japanese government shipyards at Yokosuka and Sasebo for decades.

I don't see any US investors sttepping in to save US Steel, and I don't see the US Govt "nationalizing" US Steel in non-war time.

The industrial conglomerate Esmark is offering $7.8 Billion.

The US is no longer a Democracy but has become an Idiocracy.

You sound like Vivek Ramaswamy. This will be litigated and resolved by Federal courts that fortunately are not beholden to any political party and by judges who do not have to worry about being fired for ruling against the government.

Just throwing money at lawyers. Us lawyers.

Joe signed an executive order blocking the proposed acquisition.

It'll be interesting to see how this legal action pans out.

The elephant in the room is Trump though - who was the first out of the gate by pledging to block it "instantaneously".

@NewGirl

Go on, stick it to Trump!

Yeah sure even though it is Biden who is blocking the merger.

Biased much?

Nippon Steel are lucky this didn’t go through.