On January 6, Nippon Steel's plan to acquire U.S. Steel was blocked by U.S. President Joe Biden, causing its share price to fall 1.2% to 3,145 yen on the Tokyo stock market in early trading on Monday. The acquisition was originally planned to be completed for $14.1 billion but was vetoed due to national security concerns.
Last Friday, Biden made the official decision after receiving a case submitted by the U.S. security review panel. In a written statement, he pointed out that the acquisition could lead to a major U.S. steel producer coming under foreign control, thereby posing a potential threat to key supply chains. He emphasized that the decision was entirely based on national security considerations.
In response, Nippon Steel and U.S. Steel issued a joint statement expressing strong opposition to Biden's decision, denying that the acquisition posed a threat to U.S. national security. They viewed the blockage as a purely political decision and stated they would legally challenge this ruling. However, the two companies also acknowledged that this legal route could be fraught with uncertainties and would significantly prolong the protracted battle over U.S. Steel.
This incident not only exacerbated tensions between the U.S. and its close ally Japan but also sparked global market interest in the conflict between cross-border mergers and national security. Analysts point out that this struggle will have profound impacts on future U.S.-Japan economic cooperation and global supply chain security.
