Jan. 3 (UPI) — President Joe Biden is expected to prevent the $14.1 billion sale of U.S. Steel Corp. to Nippon Steel Corp., which sent the domestic company into a premarket stock tailspin.
Biden is set to block the deal as he believes such an iconic company should remain owned and operated by a company in the United States., Bloomberg News, The New York Times, and The Washington Post reported, citing officials familiar with the matter who were not authorized to speak publicly.
Biden is expected to make the announcement on Friday, as bipartisan lawmakers and President-elect Donald Trump have also voiced opposition to the deal.
Investors turned cold at the presumptive news, with U.S. Steel shares falling 8% at one point in premarket trading.
While political leaders have mostly lined up against the deal, prospects of the Nippon-U.S. Steel falling through became real when the Committee of Foreign Investment in the United States last month failed to make a recommendation on it.
The CFIUS is made up of departments of Treasury and Justice and other critical agencies make recommendations to the administration on such large international transactions. Instead, the committee voiced concern over national security and the threat to domestic steel production.
Nippon, however, said the billion-dollar agreement has been caught up in election-year politics and both parties have promised legal action if Biden or Trump follow through with threats to nix the deal.
If the purchase falls through, U.S. Steel’s dilemma may be just beginning because it will still need a buyer to help it financially. Cleveland-Cliffs Inc., which lost out to Nippon in its bid to purchase U.S. Steel, has since purchased a Canadian steel producer.
That has lessened its appetite to chase U.S. Steel again and there are few interested parties beyond them.