President Joe Biden must make a decision about Nippon Steel’s $15 billion bid for US Steel. The deal has raised national security concerns.
Reuters reported that the Committee on Foreign Investment in the United States referred the issue to the President when it failed to reach a consensus.
President Biden has 15 working days to block this transaction, which has been opposed by both him and the former president Donald Trump.
Will the Nippon Steel – US Steel deal be completed?
The implications of the potential merger for US national security and economics has led to intense scrutiny.
If Biden does not act within the time frame, the deal will go ahead, giving an unexpected green signal to the Japanese steel giant.
The President has expressed his reservations about the merger, which is in line with Trump’s position, who was also against the merger before the end of his term.
After thorough deliberation, the CFIUS, which is responsible for assessing foreign investment for national security risk, escalated this review to Biden.
“We received the CFIUS assessment and the President will examine it,” said White House spokesperson Saloni Sharma.
Nippon Steel & US Steel confirmed that they were notified of the referral on February 2, adding to the uncertainty about the future of the deal.
Nippon Steel has asked Biden to take into consideration the security measures that Nippon Steel has taken.
The company stated that it has made “significant commitments” to grow US Steel while ensuring national security.
US Steel echoed this sentiment, stating that the deal benefits both US economic security and national security.
If the deal fails, Nippon Steel will be penalized $565 million by US Steel.
The company has indicated that it will also take legal action against the US Government if the merger is not approved.
The acquisition is crucial to Nippon Steel’s expansion strategy. It aims to increase global steel production capacity to 85 million tonnes annually from 65 million tons.
The company sees the merger as an important step in achieving its goal of exceeding 100 million tons of production.
Biden is weighing the national security risks against potential economic benefits.
The outcome of the vote will have a far-reaching impact on the global steel industry as well as US-Japan relations.
Markets and stakeholders are on edge as a decision is expected in the next two week.
This post Biden to decide fate Nippon Steel’s $15 billion bid for US Steel : here’s What You Need to Know may be modified as new developments unfold
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