Nippon's Steel Ambition Stalled: CFIUS in Limbo Over U.S. Deal

The Committee on Foreign Investment in the United States (CFIUS) failed to reach a consensus on Nippon Steel's bid to acquire U.S. Steel, leaving the decision to President Joe Biden. Both he and President-elect Donald Trump oppose the deal, citing national security risks. Nippon may face penalties if the acquisition falls through.

The Committee on Foreign Investment in the United States (CFIUS) has informed the White House of its inability to reach a consensus regarding national security risks associated with Nippon Steel's attempt to acquire U.S. Steel, as reported by the Washington Post.

The decision now rests with President Joe Biden, who has a 15-day window to take action. Both Biden and President-elect Donald Trump have previously expressed opposition to the $15 billion deal announced by Nippon Steel last December. According to Nippon Steel, no updates have been received from CFIUS. U.S. Steel has not provided any comments, although both companies had initially planned to complete the acquisition by year-end.

CFIUS raised concerns on Monday that allowing Nippon Steel's takeover of U.S. Steel might lead to reduced domestic steel production, posing a 'national security risk,' the Washington Post highlighted. Neither the U.S. Treasury Department, spearheading CFIUS, nor the White House has responded to requests for comments. A collapsed deal would impose a $565 million penalty on Nippon Steel and significantly hinder its overseas expansion strategy. The Japanese steelmaker might also consider legal action against the U.S. government if the deal disintegrates. Acquisition of U.S. Steel was a strategic move for Nippon Steel, poised to boost its global production capacity from 65 to 85 million metric tons per year, and crucial to its long-term target of exceeding 100 million tons.

(With inputs from agencies.)