Nippon Steel Corporation, its wholly owned subsidiary Nippon Steel North America (NSNA), and United States Steel Corporation (U.S. Steel) have filed two lawsuits to address illegal interference with Nippon Steel’s acquisition of U.S. Steel.
Both companies emphasize that they have engaged in good faith with all parties from the beginning, highlighting how the transaction would strengthen U.S. national security by revitalizing communities, bolstering the steel supply chain, and defending against China’s steel industry. Nippon Steel is committed to investing at least USD 1 bln in Mon Valley Works and approximately USD 300 mln in Gary Works as part of a USD 2.7 bln commitment to protect and grow U.S. Steel, benefiting its employees, communities, and the broader American steel industry.
The litigation underscores Nippon Steel’s and U.S. Steel’s commitment to completing the transaction despite political interference in the Committee on Foreign Investment in the United States (CFIUS) review process and alleged conspiracies by Cleveland-Cliffs and U.S. Steel Workers (USW) President David McCall. The companies contend that the transaction is in the best interest of all stakeholders, including U.S. Steel’s shareholders, who will receive the agreed USD 55 per share upon closing.
The lawsuits challenge three main issues: President Biden’s influence on CFIUS, which resulted in a flawed national security review and a politically motivated block on the transaction; CFIUS’s failure to properly review the transaction, depriving Nippon Steel and U.S. Steel of fair consideration; and Cleveland-Cliffs and the USW’s coordinated effort to prevent the transaction and monopolize the U.S. steel market.
The legal actions include a petition filed in the U.S. Court of Appeals for the District of Columbia Circuit, challenging the violation of constitutional and statutory rights. The petition seeks to overturn CFIUS’s flawed review and President Biden’s order blocking the transaction.
Additionally, a complaint has been filed in the U.S. District Court for the Western District of Pennsylvania, seeking an injunction against Cleveland-Cliffs, its CEO Lourenco Goncalves, and USW President McCall for anti-competitive and racketeering activities aimed at monopolizing the steel market. The lawsuit demands a halt to their illegal activities and monetary damages.
Last week, Biden blocked the proposed purchase due to national security concerns, delivering a potentially fatal blow to the contentious plan after a year of review.
