Nippon, US Steel file suit after Biden administration blocks $15 billion deal

The suit, filed Monday in the U.S. Court of Appeals for the District of Columbia, alleges that it was a political decision and violated the companies’ due process.

Nippon Steel and Pittsburgh-based U.S. Steel are filing a federal lawsuit challenging the Biden administration’s decision to block a proposed nearly $15 billion deal for Nippon to acquire U.S. Steel.

The suit, filed Monday in the U.S. Court of Appeals for the District of Columbia, alleges that it was a political decision and violated the companies’ due process.

Nippon Steel had promised to invest $2.7 billion in U.S. Steel’s aging blast furnace operations in Western Pa.’s Mon Valley and Gary, Indiana. It also vowed not to reduce production capacity in the United States over the next decade without first getting U.S. government approval.

Biden on Friday decided to stop the Nippon takeover — after federal regulators deadlocked on whether to approve it — because “a strong domestically owned and operated steel industry represents an essential national security priority. … Without domestic steel production and domestic steel workers, our nation is less strong and less secure,” he said in a statement.

While administration officials have said the move is unrelated to Japan’s relationship with the U.S. — this is the first time a U.S. president has blocked a merger between a U.S. and Japanese firm.

Biden departs the White House in just a few weeks.

The president’s decision to block the deal comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach consensus on the possible national security risks of the deal last month, and sent a long-awaited report on the merger to Biden. He had 15 days to reach a final decision.

Like Biden, President-elect Donal Trump opposed Nippon’s acquisition of US Steel due to national security concerns. The proposed sale was also opposed by US Sens. Bob Casey (D-Pa) and John Fetterman (D-Pa.).

Pennsylvania Gov. Josh Shapiro (D) did not publicly express support or opposition for the merger over the past year, saying that it was a federal issue. 

After Biden’s decision to block the merger was announced, Shapiro expressed hope that U.S. Steel would do everything in its power to protect Pennsylvania workers.

“I expect US Steel to uphold their commitments to Western Pennsylvania, refrain from threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and at US Steel HQ and their families, and work collaboratively to ensure the future of American steelmaking takes place right here in our Commonwealth,” Shapiro said in a statement.

Keystone political reporter Sean Kitchen contributed to this report.