San Francisco Frontiers - White House urges 'serious scrutiny' of US Steel takeover deal

Unveiling the planned transaction this week, the two companies depicted the deal as a marriage of the holders of top technologies that would boost steel output and accelerate efforts toward decarbonization.

But US Steel's possible sale abroad has triggered furious criticism in Washington and from trade unions.

President Joe Biden "believes the purchase of this iconic American-owned company by a foreign entity -- even one from a close ally -- appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability," National Economic Advisor Lael Brainard said in a statement.

The White House's intervention came as the companies asked the Committee on Foreign Investment in the United States (CFIUS) -- an interagency body established to review foreign takeovers of US firms -- to evaluate Nippon's $14.1 billion acquisition of Pittsburgh-based US Steel.

"We look forward to a successful review," said a statement from US Steel's press office.

"This is a strongly positive development for American steel, American jobs and America's national security," US Steel added.

Brainard said that President Biden's administration "will be ready to look carefully at the findings of any such investigation and to act if appropriate."

- 'Outrageous' -

The combined company vowed to honor contract agreements between US Steel and the United Steelworkers (USW) union.

But the USW ripped the proposed deal as reflective of a "greedy, shortsighted attitude" of US Steel, which dates to 1901, and questioned the ability of Nippon to honor contracts.

USW added late Thursday that it welcomes the US administration's assessment that heightened scrutiny was needed for the announced sale.

"Our union shares many of the concerns expressed in today's White House statement, including how this deal may impact the future of domestic steel production," said USW International President David McCall.

The transaction also drew bipartisan howls on Capitol Hill, with Pennsylvania Democratic Senator John Fetterman calling the deal "absolutely outrageous," adding that "steel is always about security as well."

Ohio Senator JD Vance and two other Republicans asked Treasury Secretary Janet Yellen, who chairs CFIUS, to block the deal, calling domestic steel production "vital to US national security."

A spokesperson for the Treasury Department declined comment.

CFIUS is required to complete a review of a transaction within 45 days. The committee can then launch an investigation of up to another 45 days.

The committee can approve the transaction afterward, require mitigation steps to address national security concerns or refer the transaction to the president if it determines the deal should be blocked.

L.Ramos--SFF