Rama Krishna Sangem
Outgoing US President Joe Biden faced a challenge from an American steel giant and a G-7, Japanese steel giant. US Steel and Nippon Steel have filed a lawsuit against US President Joe Biden’s order that blocked the $14.9 billion buyout of the American steelmaker by the Japanese company, they said on Monday.
The lawsuit asked the court to set aside the review process of the Committee on Foreign Investment in the US and Biden’s order, citing “violation of the Constitutional guarantee of due process and statutory procedural requirements, as well as unlawful political influence”.
The case was filed in US Court of Appeals for the District of Columbia Circuit.
The companies also filed a second lawsuit against Cleveland-Cliffs, its CEO Lourenco Goncalves, and USW union President David McCall “for their illegal and coordinated actions” aimed at preventing the deal.
Last week, Biden blocked the proposed purchase on national security concerns, dealing a potentially fatal blow to the contentious plan after a year of review.
Nippon Steel paid a hefty premium to clinch the deal in December 2023 in an auction, topping rivals including Cleveland-Cliffs, ArcelorMittal and Nucor , in a bet on Biden’s infrastructure spending bill.
Political and union resistance to the deal had amplified in recent months. Biden and President-elect Donald Trump, who is set to take office later this month, had opposed the deal
The White House had urged for a scrutiny of the agreement, given US Steel’s core role in producing a material that is critical to national security.
Concerns of national security
The Biden administration told Nippon Steel in a letter the deal would pose a national security risk by harming the American steel industry, Reuters reported in September, citing sources. The CFIUS, which was reviewing the deal, failed to reach a consensus, setting the stage for Biden to lock the merger.
US Steel had warned that a failure to conclude a deal would put thousands of US union jobs at risk and had also signaled it would close some steel mills. It is to be seen, if the new President Donald Trump will reverse the decision of his predecessor.
