Joe Biden blocks US Steel sale over security fears

Joe Biden has blocked US Steel’s £11.4bn sale to a Japanese rival on national security grounds.

The American giant’s shares fell approximately 7 percent in response to the outgoing US president’s decision to block the sale to Nippon Steel Corporation.

Biden said a strong steel industry, owned and operated by the United States, was critical to national security, its infrastructure, its supply chains and key economic sectors such as auto manufacturing and defense.

He first voiced his opposition to the deal in March and yesterday said: ‘This acquisition would place one of America’s largest steel producers under foreign control and create a risk to our national security and critical supply chains.

‘So, that’s why I’m taking action to block this deal. US Steel will remain a proud American company, American-owned, American-operated, and American union steelworkers.’

Even if Biden had unexpectedly rejected the deal, as both steel companies and the Japanese government had urged him to do, incoming President Donald Trump had vowed to block it.

Although the deal, which was announced more than a year ago, has been called off, it may not be the end of the matter for US Steel and Nippon Steel. The terms of the deal included a £455 million break-up fee clause, payable by Nippon to US Steel in the event it failed to obtain regulatory approvals.

Japanese press has reported that Japan’s chief executive, Eiji Hashimoto, is set to sue the US government for political interference in the deal.

The US government’s intervention contrasts sharply with the recent British attitude towards foreign acquisitions.

Labor approved Czech billionaire Daniel Kretinsky’s takeover of Royal Mail, while its steel sector is largely foreign owned.

It emerged yesterday that British Steel received a £360m loan from its Chinese owner Jingye in November.

The Government has been holding talks with Jingye about the future of British Steel’s plants in Scunthorpe and Teeside. The Chinese company wants taxpayer support to build eco-friendly electric arc furnaces at both sites.

However, as part of its worst-case planning, the Government has reportedly considered nationalizing British Steel if talks fail.