Multinationals urge Janet Yellen not to let politics stop US Steel deal

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Large multinational companies are urging Joe Biden’s administration to keep politics out of any national security review of Nippon Steel’s purchase of US Steel after a bipartisan backlash to the deal in Washington.

The Japanese company’s $14.9bn proposed acquisition of the Pittsburgh-headquartered steelmaker has provoked outrage from prominent lawmakers, with Biden administration officials calling for it to be investigated on national security grounds. 

The Global Business Alliance, a trade group representing the largest foreign multinationals investing in the US, on Tuesday wrote to US Treasury secretary Janet Yellen to ask her to focus “only on actual facts” in conducting any possible review, despite “the rhetoric being espoused from across the political spectrum”.

Yellen chairs the Committee on Foreign Investment in the United States (Cfius), an inter-governmental agency that vets deals for whether they may harm national security.

“Cfius should never become a tool for garnering political favour or allowing domestic competitors to achieve something they cannot do in a competitive market,” wrote Nancy McLernon, the GBA’s chief executive. “Efforts to delay or derail Cfius reviews could have far-ranging consequences, damaging America’s investment climate,” she said.

President Biden himself has thrown his weight behind a possible national security investigation of the deal, despite Japan being one of the US’s closest military allies.

US Steel, which is a symbol of US manufacturing prowess, has plants in Pennsylvania and Michigan, two states Biden is likely to need to win to retain the presidency in November’s election. 

GBA’s nearly 200 members include large companies from a range of sectors, including Nestlé USA, AstraZeneca, Diageo, Mercedes-Benz, Panasonic, Sony Corporation of America and chipmaker TSMC. Nippon Steel is not a member.

Nippon Steel, the world’s fourth-largest steelmaker, has agreed to pay $55 per share in cash for US Steel but investors’ uncertainty about the outlook for the deal have left the US group’s shares well below that level. On Wednesday afternoon they were trading at $48.36.

Republican lawmakers, including JD Vance of Ohio, Josh Hawley of Missouri and Marco Rubio of Florida, have written to Yellen to demand the deal is blocked. 

Summer Lee, a Democratic member of Congress from Pennsylvania, where US Steel is based, has also opposed the acquisition, along with Democratic senators John Fetterman and Bob Casey, both from the state. 

The deal has also been greeted with hostility by the United Steelworkers union, which said neither Nippon Steel nor US Steel had consulted it in advance. In December, USW president David McCall accused US Steel of choosing to “push aside the concerns of its dedicated workforce and sell to a foreign-owned company”.