Written by Trevor Hunnicutt
(Reuters) – US President Joe Biden intends to express concern about Nippon Steel's proposed $14.9 billion purchase of US Steel, a person familiar with the matter told Reuters, sending shares of the US company down 12% amid bets that the deal could face… Greater political opposition.
In December, Nippon Steel struck a deal to buy the iconic 122-year-old steelmaker for a hefty premium, betting that US Steel would benefit from spending and tax incentives in Biden's infrastructure bill.
However, several Democratic and Republican US senators criticized the deal, citing national security concerns or raising questions about why the two companies did not consult with US Steel's main union before the announcement.
The White House said last December that the deal needed to be carefully scrutinized given the key role played by US Steel in producing a material of great importance to national security. He declined to comment on Wednesday.
Nippon Steel said it believes the acquisition will be beneficial to all stakeholders. It was not possible to immediately obtain a comment outside normal business hours.
The source said that Biden will issue a statement about the planned Nippon acquisition before Japanese Prime Minister Fumio Kishida arrives on a state visit to Washington on April 10.
US officials and lawyers drafted the statement, and the White House privately informed the Japanese government of Biden's decision, according to the Financial Times, which first reported the news.
The Japanese Embassy in Washington did not immediately respond to requests for comment.
U.S. Steel, founded in 1901 by some of America's biggest magnates, including Andrew Carnegie, J.P. Morgan, and Charles Schwab, became entangled with the industrial recovery in the wake of the Great Depression and World War II.
Last year, the Pittsburgh-based company launched a formal review of its strategic options after rejecting a takeover bid from steelmaker Cleveland-Cliffs.
Its shares have been under pressure after several quarters of falling revenues and profits, making it an attractive takeover target for rivals looking to add a maker of steel used by the auto industry.
US Steel was not immediately available for comment on Wednesday. Its shares were trading at $41.12, below Nippon's offer of $55 per share.
(Additional reporting by Trevor Hunnicutt in Washington and Abhijith Ganappavaram in Bengaluru; Editing by Devika Simmath and Arun Kuyyur)
