Jaoan's Nippon Steel has filed several lawsuits in US courts after the US administration led by president Joe Biden blocked the proposed $14.9 billion acquisition of US Steel based on, in part, national security grounds, according to a January 3 White House memo.
The proposed deal had caused controversy during the 2024 US presidential election as the candidates, Donald Trump and Kamala Harris, sought to gain votes through an anti-deal stance as they tried to take a more ‘America first’ approach to the steel industry.
In a January 6 news release, the Japanese firm said the first lawsuit filed in the US Court of Appeals for the District of Columbia Circuit challenged the "violation of the Constitutional guarantee of due process and statutory procedural requirements, as well as unlawful political influence", and asked the court to set aside the Committee on Foreign Investment in the United States' review process and president Biden’s blocking order.
The second lawsuit was filed in the US District Court for the Western District of Pennsylvania against Cleveland-Cliffs’ chief executive officer (CEO) Lourenco Goncalves, and United Steelworkers' (USW) president David McCall for their “illegal and coordinated actions aimed at preventing the transaction and attempting to undermine US Steel’s ability to compete and Nippon Steel’s ability to provide American-made steel to American consumers.”
The release said that the firm is “determined that these legal actions are the necessary path toward closing the transaction and delivering shared success for US Steel employees, communities, shareholders, and customers.”
However, in a Cleveland-Cliffs’ statement, Goncalves described the lawsuit as a “shameless effort to scapegoat others for US Steel’s and Nippon Steel’s self-inflicted disaster.” Cleveland-Cliffs, a US steel producer, had its own proposal to buy US Steel rejected, and subsequently bought Stelco in Canada in November last year.
The USW issued its own statement on January 3 welcoming the decision by the Biden administration to block the Nippon Steel deal saying it was thei "right move" for its members and for US national security.
Although such lawsuits are unlikely to succeed, the lawsuit could help keep the deal alive as the Biden administration transfers power to president-elect Donald Trump on January 20. Trump is well known for changing his mind on key issues and could be persuaded by the deal if jobs are guaranteed to be protected. US Steel is based in Pittsburgh in the state of Pennsyvania and there has been talk of jobs being lost if the company isn't sold soon.
US Steel CEO David Burritt has asked Trump to have another look at the Nippon Steel deal in an interview with CNBC on Janaury 7.
For the full news release from Nippon Steel click here.
