Nippon-US Steel deal faces blockade

Apparently, some CFIUS-related news broke this afternoon. According to the FT, “President Joe Biden will block Nippon Steel’s acquisition of US Steel… on national security grounds.” WaPo repeats these reports, adding that “a White House official declined to comment, but in a statement said that **CFIUS has not yet made its recommendation to the president**.” (emphasis added) When I wrote about the deal in the WSJ in April (link: https://lnkd.in/eFEGJPmY ), I noted that “under the law, Mr. Biden can only act to stop the acquisition if the committee refers the matter to him and finds ‘credible evidence’ that the deal ‘threatens national security.’” Given the reports that the president preempted the deal and made a national security decision before the commission even referred the matter and made its recommendation, it seems that the parties to the transaction have a legitimate claim for a violation of due process… If this information proves to be true, it is disappointing on many levels… The bottom line, in my opinion, is the long-term (and entirely unnecessary) damage to the integrity and credibility of a critical national security tool and to the United States’ vital geopolitical relationship with Japan. This outcome has no plausible national security justification and is simply and transparently, to any outside observer, politically motivated. And the president’s rejection of this deal will have profound consequences. Just yesterday, the CEO of U.S. Steel said that if the deal falls through, the company will likely close its plants and move its headquarters from Pittsburgh to another state. As I said in April, if it were blocked under CFIUS, “global investors would be right to wonder whether America is open for business, while special interests would gain a new lever of power, lobbyists a new cash cow, American allies would have another reason to worry about how special their relationship with the U.S. is. And the legitimacy of a vital national security tool would be threatened.” More to come. I’ll be watching this VERY closely.