Nippon Steel and U.S. Steel said on Monday that it they are suing the Biden administration over the decision to block its sales agreement, alleging that the White House used the government review process as a pretext to reject the merger as a favor to the United Steelworkers (USW) labor union.
On Friday, Biden announced he was blocking Nippon Steel’s $14.1 billion agreement to buy U.S. Steel, citing national security concerns and threats to the domestic steel market. The CFIUS, which makes recommendations to the president on large deals involving foreign entities, declined to approve – or disapprove – the Nippon-U.S. Steel deal, allowing Biden to block the transaction.
In their lawsuit filed in the District of Columbia Circuit U.S. Court of Appeals, Japanese-based company and U.S. Steel said Biden violated Constitutional guarantees of due process and statutory procedural requirements along with “unlawful political influences.”
Nippon Steel and U.S. Steel said Monday in a statement outlining their lawsuit: “President Biden’s Order is the culmination of a months-long campaign to subvert and exploit the United States’ national security apparatus for the purpose of keeping a promise made by the President and his advisors to the USW leadership.”
A second lawsuit accuses Cleveland-Cliffs, a rival steel company that pursued their own purchase of U.S. Steel, and U.S. Steel’s union for working together to illegally nix the sale. That federal lawsuit was filed in the Western District of Pennsylvania. The steel companies added: “Today’s legal actions demonstrate Nippon Steel’s and U.S. Steel’s continued commitment to completing the transaction — despite political interference with the [Committee on Foreign Investment in the United States] process and the racketeering and monopolistic conspiracies of Cleveland-Cliffs and USW President David McCall — for the benefit of all stakeholders, including U.S. Steel’s shareholders, who will receive the agreed-upon $55 per share upon the transaction closing.”
The steel companies said that Cleveland Cliffs CEO Lourenco Goncalves and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy Allied Industries and Service Workers International Union (which represents U.S. Steel workers) of collusion: “Cleveland-Cliffs,in collusion with the leadership of the USW, has sought to prevent the transition from closing and any party other than Cliffs from acquiring U.S.Steel.”
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