Nippon Steel and US Steel have sued the US government for blocking a takeover, alleging that President Joe Biden “ignored the rule of law to curry favor” with labor unions.
The companies also alleged that President Biden, entering the final weeks of his administration, blocked Nippon Steel from purchasing US Steel to pursue his own political agenda.
In rejecting the proposed deal on FridayPresident Biden said a strong, domestically owned steel industry is essential for national security and resilient supply chains, including the automotive and defense industries.
If the $14.9bn (£11.8bn) deal goes ahead, it will create one of the world's largest steel companies outside China.
The acquisition has remained in limbo since it was first announced in December 2023.
In one lawsuit, Nippon Steel and US Steel asked the court to overturn the review process by the Committee on Foreign Investment in the United States, which has the authority to examine foreign takeovers of American companies, saying it “failed to conduct a good process.” Faith, national security-focused regulatory review process.”
In addition, the companies are also suing the president of the United Steelworkers union, David McCall, and the CEO of rival steel company Cleveland-Cliffs, Lourenco Goncalves, for their “unlawful and coordinated actions intended to block the deal.”
The United Steelworkers union said Friday it has “no doubt” that blocking the takeover is “the right move for our members and for our national security.”
The union accused Nippon of undermining the American steel industry for decades through measures that included dumping its products in the American market.
Nippon Steel and US Steel said they had “cooperated in good faith with all parties” to demonstrate how the deal “will enhance, not threaten, the national security of the United States” and how it will strengthen the US domestic steel industry “against the threat from China.” .
They also reiterated that Nippon is ready to invest $2.7 billion in Pittsburgh-based US Steel.
President-elect Donald Trump also said he would block the deal. On Monday, he posted on Truth Social saying: “Why would they want to sell US Steel now when tariffs would make it a more profitable and valuable company?”
Earlier on Monday, Japanese Prime Minister Shigeru Ishiba expressed concern about the US decision to block the takeover and the impact it might have on trade relations between the two G7 countries.
“Unfortunately, we have heard concerns expressed by Japanese industries about future investments between Japan and the United States. We must view this issue as a serious matter,” Ishiba said.
He added that while it was inappropriate for his government to comment on individual companies: “We must insist on explaining why there are security concerns, otherwise there will be no progress in future discussions.”
