US Steel Stock Sinks as Biden Blocks Nippon Steel Takeover

Shares of U.S. Steel (X) sank in intraday trading Friday as President Joe Biden blocked the $14.1 billion sale of the iconic American company to Japan’s Nippon Steel.

The White House announced the decision Friday, with the rejection based on the view that the sale posed a threat to national security.

“As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains,” Biden said.

U.S. Steel and Nippon Steel said in a joint statement that they would pursue legal action against the government.

“Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights, ” the two companies said.

Before the formal blocking of the deal, The New York Times reported that a blockage of the deal could hurt U.S. relations with Japan, a close ally and a big investor here.

U.S. regulators failed to agree on whether to allow the Japanese company’s acquisition to go through last month, passing the decision to President Biden.

US Steel’s Future Seen in Doubt

The Japanese firm had pledged to invest more than $2.7 billion in U.S. Steel facilities, and CEO David Burritt had warned of plant closures and the possibility of moving the American company’s headquarters from Pittsburgh if the government blocked the sale.

The rejection of the deal casts a pall over U.S. Steel’s future. It previously had rejected a takeover offer by Cleveland-Cliffs (CLF), which subsequently bought a Canadian steel firm, Stelco.

UPDATE—Jan. 3, 2025: This article has been updated to include Nippon Steel and U.S. Steel’s response and fresh share prices.

President Biden’s statement blocking the deal.