DOJ seeks pause in Nippon-U.S. steel merger case; Trump weighs in
The Department of Justice has filed a request with the court to extend the deadline for considering the lawsuit filed by steel companies Nippon Steel and U.S. Steel, which sought to merge—a move not approved by the American Committee on Foreign Investment, reports Reuters. This could indicate that some form of share acquisition might still occur.
At the end of 2023, the Japanese steel giant Nippon Steel, the third largest in the world by production volume, announced its intent to acquire the American company U.S. Steel for nearly $15 billion. The Japanese aimed to acquire all shares of U.S. Steel, but reassured that they would retain the current name of the American company and its headquarters in Pittsburgh, while honoring existing agreements with company unions.
However, the American Committee on Foreign Investment opposed the merger, recommending against it due to potential risks to U.S. security. U.S. Steel and Nippon Steel subsequently filed a lawsuit challenging this recommendation.
Regarding the future of this lawsuit, the Department of Justice has now taken action, reports Reuters. The agency explains that they have requested the court to extend the deadline for considering the case. The purpose of the extension is to provide the government with time to complete ongoing discussions with the steel companies about the merger, Reuters explains.
Trump supports minority stake acquisition
It is noted that in January, President-elect Donald Trump stated he would have no objection if Nippon Steel acquired a minority stake in U.S. Steel. In response to this declaration, a spokesperson for the Japanese government stated they consider this proposal a significant change in the American administration’s previous stance on the merger.
Reuters recalls that although the Japanese promised to invest significant sums in the American company following the acquisition, unions were opposed to the merger. Before the November presidential elections, both then-President Joe Biden and Donald Trump, who was seeking re-election, declared their opposition to the acquisition, aiming to gain voter support.
