US Steel Asks for Nippon Deal To Be Approved With President Biden Set to Decide

Shares of U.S. Steel (X) lost ground in premarket trading after U.S. regulators failed to agree on whether to allow Japanese firm Nippon Steel’s $14.9 billion purchase of the company to go through, instead passing it on to President Biden to decide.

The President now has 15 days to make the determination. Both he and President-elect Donald Trump have expressed opposition to the merger, arguing that a key American steelmaker should not be owned by a foreign entity.

U.S. Steel responded to the decision by the Committee on Foreign Investment in the United States (CFIUS), saying the deal “enhances U.S. national and economic security through investment in manufacturing and innovation.” It added that the Nippon transaction is “the best way, by far, to ensure that U.S. Steel, including its employees, communities, and customers, will thrive well into the future.”

The Japanese firm has pledged to invest more than $2.7 billion in U.S. Steel facilities, and CEO David Burritt has warned of plant closures and the possibility of moving the company’s headquarters from Pittsburgh, where it’s been since 1901, if the government blocks the sale.

U.S. Steel shares have yo-yoed this year on the back-and-forth news about the Nippon acquisition. They tumbled to their lowest level since September last Friday after warning that falling steel prices and the costs associated with the construction of a new factory in Arkansas will impact current quarter results. The shares have lost more than a third of their value this year.