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US President Joe Biden has issued a statement opposing the proposed acquisition of US Steel by Japan's Nippon Steel, emphasizing the criticality of maintaining domestic ownership of the iconic American steel company.
According to S&P Global Commodity Insights, Biden's statement adds to the growing scrutiny surrounding the deal, which has implications for national security, economic stability, and the future of US steelworkers. In his statement on March 14, President Biden underscored the significance of US Steel remaining a domestically owned and operated entity. He emphasized his commitment to supporting American steelworkers and ensuring the strength of US steel companies. This marks the first public declaration from Biden regarding the transaction, signaling potential obstacles ahead for the proposed acquisition. Biden's statement reads, "It is important that we maintain strong American steel companies powered by American steel workers. I told our steel workers I have their backs, and I meant it. US Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated." The proposed sale of US Steel to Nippon Steel, announced on December 18, entails a transaction valued at over USD 14 billion. However, Biden's statement raises doubts about the smooth progression of the deal, particularly given the President's focus on preserving American industrial assets. The United Steelworkers (USW), a prominent labor union representing steelworkers, has been vocal in its opposition to the acquisition since its announcement. The USW has engaged with members of Congress, highlighting concerns over the deal's ramifications on national security and the welfare of steelworkers. Lawmakers, especially in states with US Steel union operations, have echoed these concerns and called for heightened scrutiny of the transaction. The USW has expressed apprehensions regarding the impact of the acquisition on existing commitments with US Steel, including pensions, retiree healthcare, profit-sharing, and promised capital expenditures. The union had previously supported US steelmaker Cleveland-Cliffs' bid to acquire US Steel, underlining its preference for domestic ownership. President Biden's opposition to the Nippon acquisition aligns with his administration's emphasis on supporting unions and American workers. With the 2024 Presidential election looming, Biden's stance on this issue underscores his commitment to advancing the interests of working families and safeguarding critical industrial assets. US Steel CEO David Burritt has indicated that the acquisition could close in the second or third quarter of 2024, aligning with the expected timeline since the deal's announcement. However, regulatory hurdles, including approval from the Committee on Foreign Investment in the US (CFIUS), remain significant obstacles. The CFIUS has the authority to block or modify transactions that pose national security risks. The opposition from President Biden and the USW adds complexity to the proposed acquisition of US Steel by Nippon Steel. As stakeholders continue to raise concerns about the deal's implications, the fate of one of America's most storied steel companies hangs in the balance. (ANI)
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