Companies still hopeful after U.S. delays blocking Nippon Steel-U.S. Steel merger

The Biden administration delayed an order for Nippon Steel to abandon its $14.9 billion bid for U.S. Steel until June, the companies said on Saturday.

"We are pleased that CFIUS has granted an extension to June 18, 2025, of the requirement in President Biden's executive order that the parties permanently abandon the transaction," the companies said in a statement.

The move gives them some time to revive the politically contentious deal. "We look forward to completing the transaction, which secures the best future for the American steel industry and all our stakeholders," they said.

U.S. President Joe Biden blocked the acquisition on national security grounds on January 3, and Treasury Secretary Janet Yellen said this week that the interagency review body, the Committee on Foreign Investment in the United States (CIFUS), had done a "thorough analysis" of the proposed deal.

The delay will give the courts time to review a legal challenge the steelmakers brought against Biden's order.

The White House, the Treasury Department, and a lawyer for the United Steelworkers union, which has opposed the deal, could not immediately be reached for comment late on Saturday.

Bipartisan opposition

Biden, a Democrat, and his incoming successor, Republican Donald Trump, both opposed the Japanese company acquiring the American steelmaker.

U.S. Steel and Nippon Steel sued the Biden administration on Monday, alleging that the CFIUS review was prejudiced by Biden's longstanding opposition to the deal, denying them the right to a fair review. They asked a federal appeals court to overturn Biden's decision to allow them a fresh review to secure another shot at closing the merger.

The treasury secretary chairs the CFIUS panel, which screens foreign acquisitions of U.S. companies and other investment deals for national security concerns. CFIUS normally decides directly on cases or submits recommendations to the president, but in the U.S. Steel-Nippon Steel case, the panel failed to reach consensus, leaving the decision to Biden.

Damage to Japan-U.S. ties

CFIUS has rarely rejected deals involving the closely allied Group of Seven countries, which includes Japan.

Japanese Foreign Minister Takeshi Iwaya said on Sunday that he had told outgoing Secretary of State Antony Blinken during a recent meeting that Biden's decision to block the sale on national security grounds is highly regrettable.

"The broader context of the Japan-U.S. alliance is extremely important, and it is essential to handle this transaction appropriately to avoid disrupting it," Iwaya said during a talk show on public broadcaster NHK.

"Japan is the largest investor in the United States. There is widespread unease within the business community, and I will continue urging the U.S. to alleviate these concerns," Iwaya said.

(With input from Reuters)