White House Set to Block Nippon Steel's $15 Billion U.S. Steel Bid

Nippon Steel's $15 billion acquisition bid for U.S. Steel faces imminent rejection by the White House due to national security concerns. Shares of both companies saw significant fluctuations, with Nippon Steel eventually trading higher. The move comes amidst political opposition and concerns about weakening U.S. steel production and trade remedies.

Nippon Steel shares climbed on Thursday following news that President Joe Biden plans to block the company's $15 billion bid for U.S. Steel. The White House decision is based on national security risks, as bipartisan political opposition grows against the deal aimed for year-end closure.

Despite an initial drop, Nippon Steel's shares rose by 0.2% in Tokyo, outperforming the declining Nikkei index. Conversely, U.S. Steel shares fell by 17.5%. According to a confidential letter from the Committee on Foreign Investment in the U.S. (CFIUS), the deal could harm American steel production, reducing U.S. Steel's motivation to aggressively seek trade remedies.

Japan's three megabanks planned to lend Nippon Steel $16 billion for the acquisition. The company aimed to boost its global steel capacity and annual profits but faced concerns over potential equity dilution. With political opposition and national security concerns, the future of this high-stakes deal remains uncertain.

(With inputs from agencies.)