Nippon Steel contemplates filing a lawsuit against the U.S. administration, citing disapproval of President Biden's action to hinder the merger of US Steel.
Nippon Steel contemplates filing a lawsuit against the U.S. administration, citing disapproval of President Biden's action to hinder the merger of US Steel.
"Tadashi Imai, head of Nippon Steel, mentioned on Monday in a broadcasted talk to the press, confirmed by CNN, that they are considering this as a crucial move. I believe we can initiate actions, including making a statement, without wasting too much time."
Biden declared on Friday his intention to halt the questionable $14.3 billion transaction, illustrating a substantial use of executive power during his administration's final stages. He underlined the necessity of safeguarding national security and supply chains as reasons for his action.
Imai expressed his thoughts to reporters outside his residence, "We are entitled to a comprehensive review. The review process thus far and the US government's decree lack satisfactory aspects. Our organization cannot tolerate this situation, thus we are reviewing all potential responses."
The announcement of this deal stirred political controversy since its inception over a year ago, inciting bipartisan political disapproval of foreign ownership of a pivotal component of US industrial power.
The United Steelworkers (USW), the union representing American steelworkers, commended Biden's decision as a beneficial move for their members and national security.
The USW asserted in a statement that US Steel's recent financial performance indicated its potential to remain a robust and resilient enterprise. USW International President David McCall said.
However, some expressed concerns that the unraveling of the deal might deprive US Steel of essential investments and may possibly deter foreign investment in other US firms.
David Burritt, US Steel's president and CEO, labeled Biden's decision as "disgraceful and corrupt."
In late December, the Committee on Foreign Investment in the United States (CFIUS), typically referred to as CFIUS, informed Biden that it had not reached an agreement on whether US Steel's sale to Nippon Steel posed a potential threat to national security, thereby delegating the decision to the president.
US Steel and Nippon Steel have consistently maintained throughout the process that the deal is essential to provide essential investment in US Steel's domestic steel operations. US Steel has argued that it might be compelled to close the mills represented by the USW if it fails to obtain the $2.7 billion investment planned by Nippon Steel as part of its proposed acquisition.
Imai further explained, "This review is not an attempt to undermine the business relationship, but to ensure our company's integrity and the well-being of our operations in the US."
In response to the review, some analysts speculated, "If the deal falls through, it could send a negative signal to other foreign investors considering investing in US businesses."