Nippon Steel Corporation and United States Steel Corporation (X) announced on Monday their decision to file two lawsuits aiming to overturn the CFIUS evaluation process and President Biden's directive blocking their merger.
President Joe Biden announced last Friday that he would obstruct the $14.3 billion takeover of U.S. Steel by Japan's Nippon Steel, citing concerns that foreign control of one of the United States' largest steel producers could compromise national security.
"The production of steel—and the workforce behind it—forms the foundation of our nation," Biden remarked in a statement. "Maintaining a robust, U.S.-owned steel industry is a crucial national security concern and essential for ensuring resilient supply chains."
He continued, "U.S. steel companies have long contended with unfair trade practices, as foreign competitors have flooded the market with underpriced steel, causing job losses and factory shutdowns across the country. In response, I have aggressively worked to create a fair environment for American steelworkers and producers by significantly increasing tariffs on Chinese steel imports. Since my administration began, over 100 new steel and iron mills have launched due to historic investments in manufacturing, allowing U.S. companies to produce some of the world's cleanest steel."
In 2023, Nippon Steel agreed to purchase U.S. Steel in an all-cash transaction valued at $55.00 per share, totaling $14.9 billion, with requisite regulatory approvals already secured outside the U.S.
The initial lawsuit was submitted to the U.S. Court of Appeals for the District of Columbia Circuit, contesting a breach of Constitutional due process guarantees and procedural statutory mandates, citing unlawful political pressures. The suit seeks to nullify the CFIUS review process and block President Biden’s order.
The subsequent lawsuit was filed in the U.S. District Court for the Western District of Pennsylvania, accusing Cleveland-Cliffs, its CEO Lourenco Goncalves, and USW President David McCall of engaging in illegal, coordinated efforts to impede the transaction.
Nippon Steel and U.S. Steel stated regarding the legal actions: "Our legal strategies today underscore Nippon Steel's and U.S. Steel's unwavering dedication to completing this Transaction, despite political disruptions in the CFIUS process and the alleged collusive monopolistic conduct by Cleveland-Cliffs and USW President David McCall. This merger is in the best interest of all involved parties, particularly U.S. Steel shareholders, who stand to gain $55.00 per share once finalized. We are convinced that this Transaction is essential for securing U.S. Steel's future and will robustly defend our rights to achieve this goal."
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