The potential sale of U.S. Steel, one of the nation's largest domestic steel producers, has raised eyebrows among lawmakers in key battleground states and has drawn attention from the White House.
buy, sell or hold
In December, Nippon Steel, Japan's largest steel producer and fourth largest in the world, announced plans to acquire U.S. Steel for $55 per share, or approximately $14 billion. In August, Ohio-based steelmaker Cleveland-Cliffs made an offer of $35 per share for U.S. Steel, but ultimately upped the offer to match Japan's offer. That was roughly equivalent to $54 per share.
The higher offer for Cleveland vs. the Cliffs is still about $220 million less than Nippon's all-cash offer.
Concerns are growing among politicians and policymakers about the possibility of losing one of the country's largest steel producers to a foreign-controlled company. US Steel is an iconic American company founded in 1901 by legendary industrialists JP Morgan and Andrew Carnegie.
The center, also located in Pittsburgh, Pennsylvania, will be central to determining the winner of key battleground states and potentially the presidential election in 2024.
United Steelworks can block the merger
In August, Axios United Steelworkers (USW) reported that it has a contractual right to bid on U.S. Steel or certain assets if they go up for sale. The union announced it had transferred those rights to the Cleveland Cliffs.
in press release U.S. Steel notes that Nippon Steel has agreed to abide by collective bargaining agreements with unionized workers. Meanwhile, David McCall, international president of the United Steelworkers (USW), said: statement Although he is critical of the deal, he has not completely closed the door to supporting it. USW may have an opportunity to secure additional concessions, as other unions have done recently.
presidential politics
Joe Biden's re-election campaign hinges on winning support from organized labor, and his administration is expected to do whatever unions want. If the USW can leverage the agreement to obtain better terms and support it, Biden is likely to approve it after the election.
If the USW does not support this agreement, Mr. Biden will oppose it. The USW may not yet know what it wants, and Biden may be in a wait-and-see mode as well.
February 1, the hill Donald Trump has vowed to block Nippon Steel's acquisition of U.S. Steel if he wins a second term. After meeting with the Teamsters union in Washington, President Trump told reporters, “I will stop it. I think it's horrible. If Japan were to buy U.S. Steel, I would immediately stop it. absolutely.”
Additionally, third-party presidential candidate Robert F. Kennedy, Jr. wrote an op-ed that said: newsweek “I oppose the sale for a variety of reasons,” he said, accusing U.S. Steel's management of prioritizing profits at the expense of workers.
Review of regulations
US Steel preliminary power of attorney He said the deciding factor in choosing the Japanese bid over Cleveland-Cliffs was regulatory approval, not price. Specifically, U.S. Steel has a lower chance of surviving regulatory approval for national security concerns from the Committee on Foreign Investment in the United States (CFIUS) than it does antitrust review from the Department of Justice. I judged it to be expensive.
January 11th, bloomberg A review of the U.S. national security agreement is unlikely to be completed until later this year and could be extended until 2025, the report said, citing “a person familiar with the matter.” Basically, no decision will be made until after the election. The schedule contradicts statements from U.S. Steel and Nippon Steel that they expect to complete the $14.1 billion deal by spring or summer.
Battleground Senate politics
In December, Pennsylvania State Senator Bob Casey, along with Senator John Fetterman and Representative Chris Deluzio, letter It called on Treasury Secretary Janet Yellen to ask CFIUS to block the transaction.Something similar happened next letter Democratic Ohio Sen. Sherrod Brown urged President Joe Biden to review the agreement to “ensure the future of American steel is one that benefits American workers and the American economy.” requested the use of CIFUS.
In response, White House economic advisor Lael Brainard announced: statement “A foreign takeover of this iconic American-owned company, even from a close ally, poses a potential threat to national security and supply chain reliability,” said his boss, Joe Biden. “We believe it deserves serious scrutiny in terms of its potential impact.”
Steve Pavlick is a partner and head of policy at Renaissance Macro and a former Treasury official.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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