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WASHINGTON (Reuters) – The White House on Thursday said Nippon Steel Corp’s $14.9 billion proposed acquisition of U.S. Steel Corp deserves “serious scrutiny,” given the company’s core role in domestic steel production that is critical to national security.
In its first substantive public statement on the deal, the White House made clear that it supported a careful review of the transaction by the Committee on Foreign Investment in the United States (CFIUS) and possibly antitrust authorities.
National Economic Council Director Lael Brainard said President Joe Biden welcomed manufacturers from the across the world investing in U.S. jobs and workers.
“However, he also believes the purchase of this iconic American-owned company by a foreign entity – even one from a close ally – appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability,” she said in a statement issued late Thursday.
“This looks like the type of transaction that the interagency committee on foreign investment Congress empowered and the Biden administration strengthened is set up to carefully investigate,” she said. “This administration will be ready to look carefully at the findings of any such investigation and to act if appropriate.”
The strongly-worded White House statement comes amid growing criticism of the proposed deal by both Democratic and Republican lawmakers and the powerful U.S. Steelworkers union, which represents workers at the third largest U.S. steel company.
Four Democratic and three Republican U.S. senators have criticized the deal this week, citing national security concerns or raising questions about why the two companies did not consult U.S. Steel’s main union ahead of the announcement.
Nippon said on Monday it would buy Pittsburgh-based U.S. Steel for $14.9 billion in cash, prevailing over rivals such as Cleveland-Cliffs (NYSE:CLF), ArcelorMittal (NYSE:MT) and Nucor (NYSE:NUE) in an auction for the 122-year-old steelmaker.
Brainard said Biden viewed U.S. Steel as an integral part of America’s “arsenal of democracy” during World War Two and believed it remained “a core component of the overall domestic steel production that is critical to our national security.”
Biden has made restoring U.S. manufacturing a central pillar of his presidency, and often hails the creation of 800,000 manufacturing jobs during his term.
Brainard said Biden had also taken action to protect U.S. steel companies against unfair and market-distorting trade practices in China and other countries, while supporting union jobs across the economy.
“That’s why his Administration is committed to doing everything it can to ensure steelworkers can compete on a level playing field, through policies that both combat unfair trade practices and recognize that a strong U.S domestic steel industry is vital to our economy and national security,” she said in the statement.
