Royal Palm Companies CEO Daniel Kodsi discusses whether President Biden is right to block Nippon’s acquisition of U.S. Steel on ‘Varney & Co.’
President Donald Trump is set to meet with the CEO of U.S. Steel on Thursday as Nippon Steel’s vice chairman touts its proposed bid to buy the struggling steelmaker as meeting the president’s objectives.
U.S. Steel CEO David Burritt will meet with Trump at the White House, administration officials said, according to a Reuters report.
Trump has previously expressed opposition to the deal, which former President Joe Biden blocked before leaving office. He said in December, “I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan.”
The meeting comes as Nippon Steel said Thursday that its bid to buy U.S. Steel aligns with Trump’s goal of a stronger U.S. ahead of a meeting between the president and Japan’s prime minister.
DOES NIPPON STEEL’S BID TO BUY US STEEL THREATEN NATIONAL SECURITY? EXPERTS WEIGH IN
President Donald Trump is set to meet with the CEO of U.S. Steel at the White House on Thursday. (Scott Olson/Getty Images / Getty Images)
Nippon Steel said in a statement that its plan to acquire U.S. Steel for $14 billion “contributes to Trump’s goals of promoting U.S. investment, creating U.S. jobs, and strengthening U.S. manufacturing through new investment and advanced technology transfer.”
“We are convinced that our acquisition plan is the best for U.S. Steel,” Nippon Steel vice chairman Takahiro Mori told reporters on Thursday, adding that he hopes Trump’s meeting with Japanese Prime Minister Shigeru Ishiba will “convey that to Trump and open the way for a deal.”
Trump’s meeting with Ishiba is expected to occur on Friday. Mori said he visited the U.S. last week but declined to say whether he met with members of Trump’s administration.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| X | UNITED STATES STEEL CORP. | 38.78 | +0.87 | +2.29% |
| NPSCY | NIPPON STEEL CORP. | 7.16 | +0.04 | +0.56% |
US STEEL, NIPPON STEEL SUE BIDEN ADMIN OVER BLOCKED ACQUISITION
Biden blocked Nippon’s acquisition in January before he departed office after the deal was reviewed for several months by the Committee on Foreign Investment in the U.S. (CFIUS), which failed to reach a consensus on national security issues that could be raised by the deal.
Biden ultimately rejected the deal, saying in a statement, “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.”
Nippon Steel pledged to invest $2.7 billion in U.S. Steel facilities to modernize them and make them more competitive. (Justin Merriman/Bloomberg via Getty Images / Getty Images)
U.S. Steel and Nippon Steel pushed back on that reasoning and filed a lawsuit challenging the decision to block the deal, saying in a statement that the transaction “will enhance, not threaten, United States national security, including by revitalizing communities that rely on American steel, bolstering the American steel supply chain, and strengthening America’s domestic steel industry against the threat from China.”
PRESIDENT BIDEN TO BLOCK SALE OF US STEEL TO NIPPON STEEL
Nippon pledged to invest $2.7 billion in U.S. Steel’s Mon Valley Works in Pennsylvania and the Gary Works in Indiana as part of a modernization project aimed at making the facilities more competitive with international rivals. The company also said it would preserve the name, brand and headquarters of U.S. Steel and refrain from layoffs through 2026 if the deal were to proceed.
Burritt told The Wall Street Journal last year that U.S. Steel wouldn’t be able to make the investments Nippon Steel is offering to make if the deal doesn’t move forward.
“We wouldn’t do that if the deal falls through,” Burritt said. “I don’t have the money.”
U.S. Steel previously warned that it may have to close mills in Pennsylvania and Indiana if the deal doesn’t go ahead. (Justin Merriman/Bloomberg via Getty Images / Getty Images)
He added that U.S. Steel may look to shift its production to facilities in the South while shuttering facilities in Pennsylvania’s Monongahela Valley and Gary, Indiana, as well as relocate its corporate headquarters out of Pittsburgh.
U.S. Steel previously told FOX Business that the company has about 3,800 employees in Pennsylvania, including the Mon Valley Works and the headquarters, plus its research center and other corporate functions. The Gary Works has over 4,300 employees, according to the company.
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The United Steelworkers union is opposed to the transaction, with USW International President David McCall saying that Nippon is a “serial trade cheater that for decades worked to undermine our domestic industry by dumping its products into our market.”
McCall added that it’s “clear from U.S. Steel’s recent financial performance that it can easily remain a strong and resilient company” and urged its board of directors “to take the necessary steps to allow it to further flourish and remain profitable.”
Trump is also expected to meet with FedEx CEO Raj Subramaniam at the White House on Thursday, according to the report.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FDX | FEDEX CORP. | 258.01 | +5.58 | +2.21% |
Reuters contributed to this report.