Nippon Steel's Strategic Pledge to Sway U.S. Government in Steel Acquisition

Nippon Steel proposes U.S. veto power over cuts to U.S. Steel’s capacity to gain Biden's approval for acquisition. CFIUS defers the decision to Biden, who must act by January 7. Nippon pledges a 10-year commitment against cutting production, subject to Treasury review. Parties declined comment.

Nippon Steel, a leading Japanese steel manufacturer, has proposed granting the U.S. government veto power over any reduction in U.S. Steel's production capacity. This move is part of Nippon Steel's strategy to secure approval from President Joe Biden for acquiring the American steelmaker, according to an anonymous source close to the situation.

The Committee on Foreign Investment in the United States (CFIUS) recently passed the decision on whether to approve or block the deal to President Biden. Facing a decision deadline of January 7, Biden must either act or allow the merger to automatically proceed if he refrains from intervening.

The Washington Post reported earlier that in its proposal, Nippon Steel committed to maintaining current production levels for 10 years at U.S. Steel's domestic facilities, contingent upon Treasury-led panel review. Attempts to reach U.S. Steel, Nippon Steel, and the White House for comments were unsuccessful.

(With inputs from agencies.)