Japanese steelmaker Nippon Steel is yet to gain the approval of the Committee on Foreign Investment in the United States (CFIUS) regarding its proposed acquisition of US Steel, according to a report by Reuters.
Even though Nippon Steel had promised to invest at least $2.7 billion in the iconic domestic producer, keep its current workforce and continue operating its plants as SteelOrbis reported previously, several members of CFIUS have not lent strong support regarding the deal. The Japanese steelmaker had also stated that US Steel would remain an American company headquartered in Pittsburgh, Pennsylvania, and owned by its subsidiary Nippon Steel North America, with US citizens making up the majority of the board of directors and with its production meeting domestic demand.
“The committee has not yet reached consensus on whether the mitigation measures proposed by the parties would be effective... or whether they would resolve the risk to US national security arising from the transaction,” a letter from CFIUS reads.
The review by CFIUS is ongoing, with its deadline scheduled for December 23. The committee could approve the acquisition, recommend that the president block it or extend the review. If the members of the commission remain in deadlock, they will refer it to President Biden to make the call.
In the meantime, other media reports stated that the Congressional Labor Caucus has also demanded the deal be blocked by Biden, saying the deal poses a great threat to the future of the domestic steel industry. The caucus argued that, despite Nippon Steel’s verbal reassurances, it has failed to put forward any enforceable commitments in writing to hold them to their word.
If any final decision on the deal is not reached before January 20, the president-elect Donald Trump will block it, as seen from his recent statements regarding the matter.