Japan’s Nippon Steel Seeks New CFIUS Review of Bid to Buy US Steel
Japan-based Nippon Steel Corp. and U.S. Steel Corp. asked a federal court Jan. 6 to set aside the Biden administration’s “illegal and improper” decision to block Nippon Steel’s acquisition of the American firm. Their lawsuit also urges the U.S. Court of Appeals for the District of Columbia Circuit to order the Committee on Foreign Investment in the U.S. to conduct a new review of the proposed $14.9 billion transaction.
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The companies contend the administration’s decision was motivated by “political interference,” not national security considerations as required by law. They allege that CFIUS referred a decision on the acquisition to President Joe Biden so that he could honor his 10-month-old promise to the United Steelworkers leadership to block the deal.
“In short, rather than engaging in a good-faith, politically neutral review and investigation of the transaction for national security concerns, CFIUS engaged in a process that was designed to reach a predetermined result: supporting President Biden’s political decision -- made and announced in March without any consideration of national security -- to block the transaction to support his political agenda,” the companies said.
Biden issued an order Jan. 3 blocking the acquisition, saying U.S. Steel should remain in domestic hands (see 2501030009). Nippon Steel responded at the time by saying it would “take all appropriate action to protect our legal rights.”
In addition to the Biden-CFIUS lawsuit, Nippon Steel and U.S. Steel filed a lawsuit accusing Cleveland-Cliffs, Cleveland-Cliffs’ Chief Executive Officer Lourenco Goncalves and United Steelworkers International President David McCall of violating antitrust and racketeering laws by trying to subvert the deal so that Cleveland-Cliffs could acquire U.S. Steel or weaken it as a competitor. The lawsuit, filed in the U.S. District Court for the Western District of Pennsylvania, “seeks injunctions and substantial damages, which could amount to billions of dollars,” Nippon Steel and U.S. Steel said.
Goncalves criticized the lawsuits and defended the administration’s decision, saying "Japan has a decades-long history of steel overcapacity and harmful steel dumping" into the U.S. "The U.S. government has properly recognized that granting increasing influence to Nippon Steel via this acquisition is a direct threat to our economy, workforce, infrastructure and defense, all important elements of national security," he said.