Shares in US Steel soar as Donald Trump orders security review of sale
The president’s predecessor Joe Biden blocked the deal before leaving office following a vow to do the same by Mr Trump.
Shares of US Steel are hitting a 52-week high after President Donald Trump ordered a new national security review of Nippon Steel’s proposed bid to buy US Steel for nearly 15 billion dollars (£11.73 billion).
President Joe Biden blocked the deal just before leaving office and Mr Trump had vowed to do the same in previous months.
Late on Monday Mr Trump ordered the Committee on Foreign Investment in the United States to review the transaction “to assist me in determining whether further action in this matter may be appropriate”.
Shares soared 16% Monday and are up nearly 3% before the opening bell on Tuesday.
The confidential review will look for potential national security risks from the proposed deal and the US will give Nippon and US Steel time to respond to any concerns.
CFIUS will have 45 days to submit a recommendation to Trump detailing whether any measures proposed by Nippon and US Steel are sufficient to mitigate identified risks.
Nippon Steel made a nearly 15 billion US dollars offer to buy US Steel in 2023, giving rise to a political issue in the 2024 presidential election as the fate of the Pittsburgh steelmaker potentially carried with it the swing state of Pennsylvania.
Mr Biden agreed with the United Steelworkers in seeking to block the merger, while Mr Trump as a candidate said he was in outright opposition to the sale.
CFIUS sent its long-awaited report on national security concerns about the merger to Mr Biden late last year.
But the government panel failed to reach a consensus as to whether there were national security issues.
A month later Mr Biden blocked the proposed transaction, affirming an earlier vow to prevent the acquisition of the company.
Mr Biden previously came out against the deal during the presidential campaign, and was backed by the United Steelworkers, concerned over whether the company would honour existing labour agreements or slash jobs, as well as over the firm’s financial transparency.
Nippon and US Steel countered by filing a federal lawsuit shortly after, challenging Mr Biden’s decision to block the proposed acquisition of the Pittsburgh company and claiming that the head of the Steelworkers union and a rival steelmaker worked together to scuttle the buyout.
In February Mr Trump suggested that Nippon Steel would no longer buy US Steel as planned, but the Japanese company would instead invest in the symbolically important US business.
