(Bloomberg) — A US national security panel has deadlocked on its review of the sale of United States Steel Corp. to Nippon Steel Corp., a procedural development that opens the door for President Joe Biden to block the transaction.
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The case was referred by the Committee on Foreign Investment in the United States to Biden’s desk Monday, which was the deadline, according to people familiar with the matter. The proponents were notified that the panel was unable to reach consensus, which means the final decision is left up to Biden.
The president has long indicated his opposition to the transaction and is said to still be planning on blocking it, though the White House has never said flatly that he would. He has 15 days from the referral to announce a decision and has repeatedly said US Steel should remain domestically owned and operated.
A White House spokeswoman, Saloni Sharma, said “we received the Cfius evaluation and the president will review it,” declining further comment on Monday night.
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The companies have signaled that they plan to challenge any refusal in court.
“During the 15-day period that the president has to make a final decision, we urge him to reflect on the great lengths that we have gone to address any national security concerns that have been raised and the significant commitments we have made to grow US Steel, protect American jobs, and strengthen the entire American steel industry,” Nippon Steel said in a statement.
US Steel, in a statement, said the deal “forges an alliance in steel to combat the competitive threat from China. This is a transaction that should be approved on its merits.”
President-elect Donald Trump has said he would block the acquisition, but the timeline means it will be resolved before he takes office.
The agreement, first announced in December 2023, became an issue in the US presidential election because of opposition from the powerful United Steelworkers union. Yet some local union officials, mayors and federal lawmakers have signaled support and called on Biden to allow the deal to proceed.
The companies argue that the acquisition would create a company with global scale to compete with China in a key sector, while the union has said Nippon Steel is offering too few firm commitments about the future of the company’s unionized plants.
