Nippon Steel and US Steel are suing the US government for blocking a takeover bid, claiming President Joe Biden “ignored the rule of law to curry favor” with unions.
The two companies also alleged that President Biden, who is entering the final weeks of his term, blocked Nippon Steel from purchasing US Steel to pursue his own political agenda.
In rejecting the proposed deal Friday, President Biden said a strong domestic steel industry was essential for national security and resilient supply chains, including for the automotive and defense industries.
If the $14.9bn (£11.8bn) deal goes through, it would create one of the world’s biggest steel companies outside China.
The takeover has been in limbo since its first announcement in December 2023.
In a lawsuit, Nippon Steel and US Steel asked the court to overturn the review process of the Committee on Foreign Investment in the United States, which has the power to control foreign takeovers of American companies, claiming that he “did not conduct a proper investigation.” faith, regulatory review process focused on national security”.
Additionally, the companies are also suing United Steelworkers union president David McCall and rival steel company Cleveland-Cliffs CEO Lourenco Goncalves for “their illegal and coordinated actions to prevent the transaction.”
On Friday, the United Steelworkers union said it had “no doubt” that blocking the buyout was “the right decision for our members and for our national security.”
The union accuses Nippon of undermining the U.S. steel industry for decades through measures that included dumping its products into the U.S. market.
Nippon Steel and US Steel said they had “engaged in good faith with all parties” to show how the deal would “enhance, not threaten, the national security of the United States” and how it would strengthen the US domestic steel industry “against the threat from China”. .
They also reiterated that Nippon was willing to invest $2.7 billion in Pittsburgh-based US Steel.
Earlier on Monday, Japanese Prime Minister Shigeru Ishiba expressed concerns about the US decision to block the takeover and the impact it could have on trade relations between the two G7 countries.
“Unfortunately, it is true that we have heard concerns expressed by Japanese industries regarding future investments between Japan and the United States. We must treat this issue as a serious matter,” Mr. Ishiba said.
He added that while it was inappropriate for his government to comment on individual companies: “We must insist on an explanation of why there are security concerns, otherwise there will be no progress in future discussions. “
