Biden Faces Lawsuit From Nippon, US Steel After Blocking Their $15B Merger

The two steel giants argue that the merger block was politically motivated and violated their due process rights.

By Thea Felicity

Jan 06 2025, 08:31 AM EST

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Nippon Steel and US Steel were supposed to break the industry with a $15 billion merger until outgoing US President Joe Biden blocked the deal over national security concerns.

In response, the two steelmaker giants are suing the Biden administration. The newly filed lawsuit was sent to the US Court of Appeals for the District of Columbia, which claimed that the decision was an obvious politically motivated one, and violated the rights of the companies to due process.

According to Yahoo Finance, Nippon Steel had earlier agreed to invest heavily in the aging infrastructure of US Steel, hence, the merger talk. Initially, they had pledged a $2.7 billion modernization of facilities in Indiana and Pennsylvania, with the company assuring production capacity in the US would not decrease for the next ten years without the government's consent.

All this notwithstanding, the Biden administration found a reason to block it, citing a domestically controlled steel industry as the key to maintaining national security.

Why Biden Blocked the Nippon-US Steel Merger

This is the first time a US president blocked a merger between an American and a Japanese company. According to the administration, the decision was not political in nature, relating to US-Japan relations. Rather, it simply reflected the government's need for a powerful steel sector at home. President Biden emphasized the role of domestic production and workers towards strengthening the nation's security, per CBS News.

The Committee on Foreign Investment in the United States (CFIUS), which manages such deals, could not agree on the identified risks last month. This deadlocked the case to be finally decided by President Biden, and he did so within 15 days of receiving their report. It comes at a timely moment for him as he enters the last weeks of his term without a solution for the contentious balance between foreign investment and national interest.

Nippon and US Steel have argued that not only are blocked mergers antithetical to business plans but they also raise a big question regarding transparency and consistency of regulatory decisions bearing on international business.