Nippon Steel President Tadashi Imai said suing the U.S. government is one of the "important options," Nippon Television reported Monday after President Joe Biden blocked his proposed purchase of U.S. Steel, citing national security concerns.
Here's what could happen next:
The deal itself
The proposed deal has still not been canceled by the companies even after Biden blocked.
In a joint statement, Nippon and US Steel called Biden's decision "illegal" and Nippon Steel may file a lawsuit against the US government challenging the procedures underlying the decision.
David Burritt, CEO of US Steel, said Friday: "We are committed to fighting President Biden's political corruption."
Some lawyers, such as Nick Wall, a mergers and acquisitions partner at Allen & Overy, said What The legal challenge will be difficult.
Nippon Steel says it has made numerous concessions, including an offer to move its headquarters to Pittsburgh, to satisfy CFIUS, the Committee on Foreign Investment in the United States, the panel that decides the advisability of foreign purchases of US companies.
CFIUS was divided on the decision and made no recommendations on the transaction.
“If they go to court, most of the decisions of the various CFIUS agencies will be made public," said Brett Lambert, a former senior Pentagon official under Barack Obama, citing the rare step of sending a divided decision to the president.
If the deal doesn't go through, Nippon Steel will have to pay a termination fee of 565 million dollars.
The future of US Steel
Pittsburgh-based US Steel warned that without a deal, plants could close and thousands of jobs would be at risk. US Steel's earnings have fallen for nine straight quarters amid a global industry downturn, but its forward price-to-earnings ratio remains at 12.87, higher than its U.S. peers, according to LSEG data.
