Steel giants' merger faces legal delay amid security concerns

At the end of 2023, Japanese steel giant Nippon Steel, the third-largest in the world by production volume, announced plans to acquire the American company U.S. Steel for nearly $15 billion. The Japanese company aimed to acquire all shares in U.S. Steel but assured that the American company's name and headquarters in Pittsburgh would remain unchanged and that existing agreements with unions would be honoured.

However, the U.S. Committee on Foreign Investment opposed the merger, recommending against it due to potential threats to U.S. security. U.S. Steel and Nippon Steel filed a lawsuit in response to this recommendation.

Reuters reports that the Department of Justice has taken action regarding the future of this lawsuit. The agency explains that it requested the court extend the deadline for considering the case. The extension gives the government time to complete ongoing discussions with the steel companies regarding the merger.

In January, President-elect Donald Trump stated he would not mind if Nippon Steel acquired a minority stake in U.S. Steel. In response to this declaration, a spokesperson for the Japanese government remarked that this proposal represents a significant change from the previous stance of the American administration regarding the merger.

Reuters recalls that although the Japanese announced they would invest substantial amounts of money in the American company post-acquisition, unions opposed the merger. Before the November presidential elections, both then-President Joe Biden and Donald Trump, who were seeking re-election, declared themselves opponents of the acquisition to gain votes.