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WASHINGTON (AP) — Nippon Steel and U.S. Steel filed a federal lawsuit Monday challenging a Biden administration decision to block Nippon's proposed $15 billion acquisition of the Pittsburgh company and said that the head of the Steelworkers union and a rival steelmaker worked together to scuttle the buyout.
In moving to block the transaction Friday, Biden said U.S. companies producing a large amount of steel need to "keep leading the fight on behalf of America’s national interests,” though Japan, where Nippon is based, is a strong ally.
In separate lawsuits filed Monday in the U.S. Court of Appeals for the District of Columbia and the U.S. District Court for the Western District of Pennsylvania, the steelmakers allege that it was a political decision made by the Biden administration that had no rational legal basis.
“Nippon Steel and U. S. Steel have engaged in good faith with all parties to underscore how the Transaction will enhance, not threaten, United States national security," the companies said in a prepared statement Monday.
Nippon Steel had promised to invest $2.7 billion in U.S. Steel’s aging blast furnace operations in Gary, Indiana, and Pennsylvania’s Mon Valley, and had said it is best positioned to help the U.S. compete in an industry dominated by the Chinese.
U.S. Steel has warned that, without Nippon Steel’s cash, it will shift production away from the blast furnaces to cheaper non-union electric arc furnaces and move its headquarters out of Pittsburgh.
Biden on Friday halted the takeover after federal regulators deadlocked on whether to approve it — because “a strong domestically owned and operated steel industry represents an essential national security priority. ... Without domestic steel production and domestic steel workers, our nation is less strong and less secure," he said in a statement.
While administration officials have said the decision was unrelated to Japan's relationship with the U.S. — this is the first time a U.S. president has blocked a merger between a U.S. and Japanese firm.
Biden departs the White House in two weeks.
The president's decision arrived after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach consensus on possible national security risks last month.
Robyn Patterson, a White House spokesperson said in a statement defending the President’s decision that “a committee of national security and trade experts determined this acquisition would create risk for American national security.”
“President Biden will never hesitate to protect the security of this nation, its infrastructure, and the resilience of its supply chains,” Patterson said.