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KEY TAKEAWAYS
- U.S. Steel and Nippon Steel said Monday that they are suing the U.S. government over President Joe Biden’s blocking last week of the $14.1 billion sale of the iconic American company to the Japanese firm on national security grounds.
- U.S. Steel and Nippon Steel said they want the court to "set aside" both Biden’s blocking order as well as the review process by the Committee on Foreign Investment in the United States (CFIUS).
- They also sued Cleveland-Cliffs and its CEO Lourenco Goncalves as well as the Allied Industrial and Service Workers International Union’s President David McCall over coordinated actions to block the deal.
U.S. Steel X and Nippon Steel announced Monday that they were suing the U.S. Government over the President Joe Biden blocking the sale of $14.1 billion of iconic American firm to Japanese company on national security grounds last week.
Both companies are suing to try and save the deal. Their suit, filed in the U.S. Court of Appeals for the District of Columbia Circuit, alleges that Biden's order violated the “constitutional guarantee of due process and statutory procedural requirements,” and exerted “unlawful political influence," they said.
U.S. Steel and Nippon Steel said they want the court to “set aside” Biden’s blocking order as well as the review process by the Committee on Foreign Investment in the United States (CFIUS), which last month failed to agree on whether to allow Nippon Steel’s acquisition to go through.
Separate Lawsuit Targets Cleveland-Cliffs, Its CEO, and Steel Workers Union President
The two companies also said they are suing domestic rival Cleveland-Cliffs (CLF), the company’s CEO Lourenco Goncalves, and Allied Industrial and Service Workers International Union President David McCall.
Cleveland-Cliffs had offered to buy U.S. Steel in 2023 and backed out after the Nippon deal was announced in December of that year. The Ohio-based company’s initial offer had the support of the United Steelworkers and less pushback from Washington.
The second lawsuit filed in U.S. District Court for the Western District of Pennsylvania alleges that Cleveland-Cliffs and the others “coordinated actions aimed at preventing the transaction and attempting to undermine U. S. Steel’s ability to compete and Nippon Steel’s ability to provide American-made steel to American consumers.”
Investopedia hasn't independently reviewed the lawsuits.
U.S. Steel and Nippon Steel said they want an injunction preventing the three parties from "engaging in further collusive and anticompetitive behavior, and to impose substantial monetary damages for their conduct."
Cleveland-Cliffs didn't immediately respond to a request for comment.
“By blocking Nippon Steel’s attempt to acquire U.S. Steel, the Biden administration protected vital U.S. interests, safeguarded our national security and helped preserve a domestic steel industry that underpins our country’s critical supply chains," USW International President David McCall said in a statement to Investopedia. “We are reviewing the complaint and will vigorously defend against these baseless allegations.”
U.S. Steel stocks rose by more than 4 percent in Monday’s intraday trade.
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