White House representatives signal that President Joe Biden will not block Nippon Steel’s application to acquire US Steel in the near future amid growing concerns about the political and economic consequences of cancelling the deal. However, the president remains opposed to the transaction, Japan media said.
Last week, the United States indicated its willingness to take measures to prevent the deal. The controversial acquisition plan faced opposition from Biden and Vice President Kamala Harris, the Democratic presidential candidate, as well as former President Donald Trump, her Republican rival in the race.
Nippon Steel, the fourth largest producer in the world, and US Steel, the 24th largest, announced a $14.1 billion acquisition deal in December. US Steel and its shareholders support the deal, which would enhance its competitiveness in the global market.
The pace of internal discussions has slowed. Moreover, US Steel’s shares have risen by more than 12 percent over the past two trading days as investors have grown more optimistic about the deal proceeding.
The influential steelworkers’ union is strongly opposed to this deal. Consequently, the delay in the announcement occurred against a backdrop of warnings from investors, Pennsylvania Democrats, and some members of the steelworkers’ union that the failure of the deal could trigger an economic disaster for the beleaguered steel belt of Pennsylvania.
Nippon Steel sought to allay concerns by announcing that the majority of the board members and senior executives of US Steel would be US citizens, and that its headquarters would remain in Pittsburgh, Pennsylvania, a key state in the presidential race.
However, the move that the White House may have hoped to leverage to enhance its chances of securing the 19 electoral votes in Pennsylvania instead provoked significant resistance among Democrats in the steel belt of western Pennsylvania.
