U.S. Steel Faces Legal Challenge Over Blocked Acquisition by Nippon Steel
The Center Square – U.S. Steel announced on Monday that union corruption was behind the recent blockage of Nippon Steel’s $14.9 billion acquisition bid. The steel giant and Nippon have filed lawsuits in the U.S. Court of Appeals for the District of Columbia and the Western District of Pennsylvania, seeking preliminary injunctions and expedited legal reviews. This follows a decision by President Joe Biden, supported by the United Steel Workers union and bipartisan lawmakers, to reject the deal, citing national security concerns and job stability.
Biden’s administration argued that transferring U.S. Steel to a Japanese competitor could exacerbate America’s vulnerabilities in the steel supply chain, especially amid concerns over China’s dumping of low-priced steel into the U.S. market. During negotiations, Nippon pledged to distance itself from Chinese operations, secure jobs, and modernize U.S. facilities to align with climate goals—a commitment U.S. Steel workers find dubious.
Union President David McCall criticized Nippon, labeling it a "serial trade cheater," and urged U.S. Steel’s Board to take steps for the company’s resilience amid changing industry dynamics. Despite McCall’s stance in favor of Biden’s decision, over 1,000 U.S. Steel employees rallied in September supporting the Nippon deal, indicating a split among the workforce. Local officials also expressed concern over potential job losses if U.S. Steel relocated its headquarters outside of Pittsburgh.
The situation is compounded by Cleveland-Cliffs, an Ohio-based company, which offered a lower bid for U.S. Steel earlier this year, a deal that was reportedly rejected. Both Nippon and U.S. Steel accuse Cleveland-Cliffs and the union of pressuring regulators against their acquisition. The outcome of the lawsuits remains to be seen as U.S. Steel navigates this turbulent landscape.
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