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US Committee on Foreign Investment Split on Nippon-US Steel Deal – Reports
December 24, 2024
Reports indicate that the Committee on Foreign Investment in the United States (CFIUS) could not reach a consensus on the national security risks posed by Nippon Steel’s $15bn bid to acquire US Steel. The decision is now in the hands of President Joe Biden, who has 15 days to act. Both Biden and elected President Donald Trump have previously opposed the deal. CFIUS raised concerns that the takeover could reduce domestic steel production, posing a national security risk. Nippon Steel proposed appointing US citizens to top positions at US Steel to mitigate these risks, but CFIUS remained divided on whether this would be enough. The deal, which Nippon Steel hoped to finalize by year-end, carries a $565mn penalty if it collapses, potentially damaging Nippon Steel’s overseas expansion. The company aims to increase its steel production capacity, with the US Steel acquisition being central to this growth. Japanese Prime Minister Shigeru Ishiba recently appealed to Biden to approve the deal.
US Steel bonds traded stable with its 6.875% 2029s at 100, yielding 6.87%.
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