The United States Steel logo is pictured outside the headquarters building in downtown Pittsburgh, April 26, 2010. (Gene J. Puskar/AP)
MUNSTER, Ind. (Tribune News Service) — U.S. Steel CEO David Burritt called the Biden administration’s decision to block Nippon Steel’s $14.9 billion acquisition “shameful and corrupt.”
U.S. Steel and Nippon Steel objected to President Joe Biden’s decision to block the blockbuster deal, which was based on the grounds that it would erode domestic steelmaking capacity and threaten national security by putting the United States at the mercy of business leaders in other countries if it needed to ramp up steel production for ships, munitions and other military equipment for a future war.
The two steelmakers filed lawsuits in Western Pennsylvania and Washington, D.C. Monday in an effort to ensure U.S. Steel shareholders will receive the $55 per share they were promised.
“These legal actions are necessary to protect Nippon Steel’s and U. S. Steel’s right to proceed with their Transaction, free from illegal and improper political and anticompetitive interference,” the steelmakers said in a joint statement.
Burritt issued a statement of his own, condemning the decision after the Committee for Foreign Investment in the United States raised national security concerns without offering a unanimous recommendation that the deal be stopped.
“President Biden’s action is shameful and corrupt. He gave a political payback to a union boss out of touch with his members while harming our company’s future, our workers, and our national security,” Burritt posted on the social network X, formerly Twitter. “He insulted Japan, a vital economic and national security ally, and put American competitiveness at risk. The Chinese Communist Party leaders in Beijing are dancing in the streets. And Biden did it all while refusing to even meet with us to learn the facts.”
U.S. Steel has accused the United Steelworkers union leadership, which has staunchly opposed the deal, as not listening to members about an acquisition that would have resulted in $5,000 closing bonuses.
Burritt referenced China in his statement because part of the rationale of the deal was to make Nippon Steel, already the world’s fourth largest steelmaker, an even bigger company to compete with the Chinese steelmakers that dominate global steel production. Six of the world’s top 10 steelmakers by volume are based in China, while 24 of the world’s top 44 steelmakers are Chinese.
China makes six times as much steel as the next largest country, India, according to the World Steel Association. It also makes nearly six times as much steel as Japan and American combined, dwarfing all other competitors in the world steel market and being widely blamed for most of the global steelmaking overcapacity.
Nippon Steel made 43.66 million tons of steel in 2023 while U.S. Steel made 15.75 million tons of steel, according to the World Steel Association. Nippon Steel would have become the world’s third largest steelmaker if it acquired U.S. Steel and maintained its current production level.
Burritt courted buyers for the 124-year-old steel company after it got an unsolicited buyout offer from Cleveland-Cliffs in 2023. He stood to reap a personal windfall of $72 million from a sale. The compensation would include more than $53 million in stock and more than $13 million in cash, according to the U.S. Securities and Exchange Commission.
U.S. senators had questioned the size of the “golden parachute” and whether it was a motive to get the deal done.
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