Nippon Steel to sue US govt as Biden blocks $14.9B acquisition deal

Nippon Steel has decided to file a lawsuit against the US government to challenge the appropriateness of the procedures by which President Joe Biden issued an order to block its acquisition of US Steel, the Nikkei Business reported.

US Steel and Nippon Steel said on Friday they would take all "appropriate action to protect their legal rights" after Biden's move.

Both firms called the decision "a clear violation of due process and the law."

"The President's statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision," the companies said in a joint statement.

Biden blocked the $14.9 billion sale, citing a strategic need to protect domestic industry.

The move came after a government panel failed to reach consensus last month on whether the acquisition threatened US national security, shifting the decision to the Democrat in the waning days of his presidency.

"This acquisition would place one of America's largest steel producers under foreign control and create risk for our national security and our critical supply chains," Biden said in a statement.

"That is why I am taking action to block this deal."

'Bold action'

The United Steelworkers union quickly welcomed the announcement.

"We're grateful for President Biden's willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers," USW International President David McCall said.

US Steel's shares slumped more than five percent in early trading.

Biden's decision, less than three weeks before he leaves office, follows extended wrangling over competing domestic political, economic and trade demands.

The veteran Democrat, who made the rebuilding of the US manufacturing base a major goal of his administration, had criticised the deal for months, while holding off on a move that could risk damaging relations with Tokyo.

There was rare bipartisan agreement on the issue, with Republican president-elect Donald Trump and incoming vice president JD Vance also campaigning against the sale.

Nippon Steel had touted the takeover as a lifeline for a US company that is long past its heyday, but opponents warned that the Japanese owners would slash jobs.