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Nippon Steel and U.S. Steel have filed a federal lawsuit challenging the Biden administration’s decision to block a proposed $15 billion acquisition of Pittsburgh-based U.S. Steel by Nippon Steel.
The lawsuit, submitted Monday to the U.S. Court of Appeals for the District of Columbia, alleges that the decision was politically motivated and violated the companies’ due process rights.
“Nippon Steel and U.S. Steel have acted in good faith throughout this process, demonstrating how the transaction would bolster—not undermine—U.S. national security,” the companies stated. They emphasized the deal’s potential to revitalize American steel communities, strengthen the domestic steel supply chain, and counter the growing threat from China. Nippon Steel further committed to investing $2.7 billion in U.S. Steel’s aging facilities in Gary, Indiana, and Pennsylvania’s Mon Valley while maintaining production capacity for at least a decade.
On Friday, President Joe Biden intervened to block the deal after federal regulators failed to reach a consensus on its national security implications. In his statement, Biden stressed the importance of a domestically owned and operated steel industry to safeguard U.S. security, saying, “Without domestic steel production and workers, our nation is less strong and less secure.”
This marks the first instance of a U.S. president blocking a merger between American and Japanese firms. However, administration officials have denied any connection to the broader U.S.-Japan relationship. Biden, who leaves office in a few weeks, made the decision after receiving a report from the Committee on Foreign Investment in the United States (CFIUS), which had reviewed the deal and forwarded their findings to the president last month.
In addition to the lawsuit against the Biden administration, Nippon and U.S. Steel filed a separate suit in the U.S. District Court for the Western District of Pennsylvania. This lawsuit accuses Cleveland-Cliffs Inc., a rival steelmaker, its CEO Lourenco Goncalves, and United Steelworkers union leader David McCall of orchestrating a campaign of anticompetitive and racketeering activities to block the merger.
The companies allege that Cleveland-Cliffs and the Steelworkers conspired to ensure no entity other than Cleveland-Cliffs could acquire U.S. Steel. The rivalry dates back to 2023, when Cleveland-Cliffs made an unsuccessful $7 billion bid for U.S. Steel before Nippon Steel’s $15 billion all-cash offer was accepted.
Nippon and U.S. Steel further claimed that they submitted three draft national security agreements to CFIUS to address concerns but were met with resistance. According to the lawsuit, CFIUS refused to engage with the companies, alleging the process was manipulated to align with a predetermined decision by Biden.
The controversy over the blocked deal extends to the incoming administration. President-elect Donald Trump, who will take office soon, has vowed to uphold the ban on the acquisition. Throughout his campaign, Trump consistently opposed the deal, pledging to bolster U.S. Steel through tax incentives and tariffs.
Shares of United States Steel Corp. rose more than 3% in early trading Monday, reflecting the market’s reaction to the lawsuits and ongoing developments.
