US Steel and Nippon Steel Challenge US Government's Block on $14.1B Deal
US Steel and Nippon Steel have initiated legal action against the US government following President Biden's recent decision to block their $14.1 billion acquisition on national security grounds, seeking to overturn the ruling and related review processes.
KEY POINTS
- US Steel and Nippon Steel are suing the US government after President Biden blocked their $14.1 billion merger citing national security concerns.
- The companies aim to have the court nullify both the presidential block and the Committee on Foreign Investment in the United States (CFIUS) review process.
- They have also filed a separate lawsuit against Cleveland-Cliffs, its CEO Lourenco Goncalves, and Allied Industrial and Service Workers International Union President David McCall for allegedly collaborating to obstruct the deal.
US Steel (X) and Nippon Steel announced on Monday their lawsuit against the US government challenging President Biden's recent decision to halt the $14.1 billion sale of the iconic American steelmaker to the Japanese company, citing national security risks.
The lawsuit, filed with the US Court of Appeals for the District of Columbia Circuit, asserts that the presidential order violated constitutional due process and statutory procedures, while exerting unlawful political influence.
Both companies seek a court ruling to overturn Biden’s blocking order and the CFIUS review, which last month failed to reach consensus on approving Nippon Steel’s acquisition.
Separate Legal Action Targets Cleveland-Cliffs and Union Leaders
Additionally, US Steel and Nippon Steel have filed suit against domestic competitor Cleveland-Cliffs (CLF), its CEO Lourenco Goncalves, and Allied Industrial and Service Workers International Union President David McCall.
Cleveland-Cliffs had previously made an acquisition offer for US Steel in 2023 but withdrew following the announcement of the Nippon Steel deal in December. Their offer had garnered support from the United Steelworkers union and faced less resistance from Washington.
The second lawsuit, lodged in the US District Court for the Western District of Pennsylvania, alleges coordinated efforts by Cleveland-Cliffs and others to block the transaction and undermine US Steel’s competitive position as well as Nippon Steel’s ability to supply American-made steel to the US market.
Investopedia has not independently verified the claims made in these lawsuits.
US Steel and Nippon Steel are seeking an injunction to prevent further collusive and anti-competitive conduct by the defendants, alongside substantial monetary damages.
Cleveland-Cliffs has not yet commented on the lawsuits.
In response, USW International President David McCall stated, “By blocking Nippon Steel’s acquisition attempt, the Biden administration protected critical US interests, national security, and preserved our domestic steel industry that supports essential supply chains. We are reviewing the complaint and will vigorously defend against these unfounded claims.”
Following the news, US Steel shares rose more than 4% during Monday’s trading session.
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