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A committee of top government agency officials has notified President Joe Biden that it has not reached a consensus on whether a sale of US Steel to a Japanese rival poses a national security risk, according to two sources familiar with the matter.
The fate of Nippon Steel’s acquisition of US Steel is now in the hands of Biden, who is expected to block it after arguing for months that the company should remain American-owned to protect domestic steel jobs. The Washington Post was first to report on the committee’s review.
CNN has reported throughout the monthslong review that the Committee for Foreign Investment in the United States, known colloquially as CFIUS, was deadlocked over whether the deal posed a national security risk beyond being a political lightning rod.
Customarily, a final report from the committee informs a president’s view of the potential risks a deal poses. Treasury chairs the committee, which is composed of high-level officials from the president’s Cabinet agencies who are responsible for areas of national security.
But within the committee, top officials expressed frustration about public opposition to the deal by Biden, Vice President Kamala Harris and President-elect Donald Trump, imperiling the group’s ability to review the deal on its merits.
Both US Steel and Nippon have maintained that the deal poses no national security threat. The companies each put out statements Monday night saying CFIUS notified them that it failed to reach a consensus and referred the matter to Biden to make a decision within the next 15 days.
Shares of US Steel (X) fell 3% in premarket trading Wednesday.
“The transaction between US Steel and Nippon Steel enhances US national and economic security through investment in manufacturing and innovation – by a company based in one of the United States’ closest allies – and forges an alliance in steel to combat the competitive threat from China,” US Steel said in a statement. “It is our hope that President Biden will do the right thing and adhere to the law by approving a transaction that so clearly enhances U.S. national and economic security.”
A spokesperson for Nippon said the company urges Biden “to reflect on the great lengths that we have gone to address any national security concerns that have been raised and the significant commitments we have made to grow US Steel, protect American jobs, and strengthen the entire American steel industry, which will enhance American national security.”
Nippon agreed to buy US Steel a year ago for nearly double the price of the hostile offer the company received from US-based Cleveland Cliffs. To secure approval for the deal, Nippon pledged to invest billions of dollars in US Steel’s business in critical states.