The US authorities have extended the deadline imposed on the Japanese steelmaker Nippon Steel to withdraw its acquisition plan for the American US Steel until June 18, after both firms filed a lawsuit against the US for the blockade of the operation.
US Steel expressed this Sunday in a statement its “satisfaction” with the decision of the Committee on Foreign Investment in the United States (CFIUS) to “grant an extension” until the aforementioned date, which is almost five months longer than the one initially ordered by the American authorities.
The two firms “hope to complete the transaction” despite the decision to block it announced by US President Joe Biden on the 3rd, and consider that the merger “would guarantee the best future for the US steel industry”, according to US Steel. in a statement reported by the Japanese media.
The order issued by Biden urged both companies to take the necessary steps to “fully and permanently abandon” the merger plan within 30 days, although it noted that this period could be extended by decision of the CFIUS.
On the 6th, Nippon Steel jointly filed a lawsuit with US Steel to overturn Biden’s decision in the United States Court of Appeals for the District of Columbia Circuit “challenging the violation of the constitutional guarantee of due process and procedural requirements as well as illegal political influence,” the text detailed.
The companies argued that the blockade does not comply with the regulations governing the Committee on Foreign Investment in the United States, a body that did not reach a consensus and granted the last word on the operation to the president.
In that same document, the companies consider that Biden’s arguments, which justified their blockade for reasons of “national security”, lack basis, they assure that it has been an action to favor their own political interests and point out that they will take “all appropriate measures” to protect their rights.
Turn to protectionism
Biden’s decision represents a turn to protectionism that moves away from the investment opening policy that has dominated US regulatory practice for decades and that with the arrival to the presidency in 2017 of Donald Trump – who had already assured that he would block the merger once he returned to power on January 20 – began to change.
The formal blocking of the operation, valued at about 14 billion dollars, frustrates the merger of the fourth largest steel company in the world by production volume, Nippon Steel, with the twenty-fourth, US Steel, which was going to create a colossus capable of competing with others. such as ArcelorMittal or the Chinese giants led by Baowu Steel.
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