United States Steel issued a warning on Wednesday that it may close its headquarters and factories in Pennsylvania, a critical swing state in the November election, if an acquisition by Japan’s Nippon Steel is not approved.
The transaction was hailed as a lifeline to one of the defining industries of western Pennsylvania by supporters of the agreement at a rally in downtown Pittsburgh.
However, US Steel’s shares experienced a nearly 17.5 percent decline in response to a Washington Post report that President Joe Biden intends to obstruct the agreement. Unnamed sources with identical information were cited by Bloomberg News.
In December, US Steel reached a $14.9 billion agreement to sell itself to Nippon. Nippon has committed to making investments to maintain the competitiveness of Pennsylvania factories and to establish fresher “mini mills” in the American South.
However, the United Steelworkers (USW) union’s condemnation of the transaction has resulted in an avalanche of political opposition. The union derided the Pittsburgh rally on Wednesday as a “increasingly desperate” gambit.
The company outlined the “unavoidable” negative consequences for the Pittsburgh region if the agreement is terminated, as described by Chief Executive David Burritt.
“Without the Nippon Steel transaction, US Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk,” according to a statement issued by the organization.
“The lack of a deal with Nippon Steel raises serious questions about US Steel remaining headquartered in Pittsburgh,” according to the report.
At a Labor Day election campaign event in Pittsburgh on Monday, Vice President Kamala Harris reiterated Biden’s position, asserting that US Steel should remain “American-owned and American-operated.”
Donald Trump, the former president, has also pledged to obstruct the agreement, and his running companion, J.D. Vance, has led congressional opposition to the acquisition. Vance has described domestic steel production as a national security priority.
Pennsylvania is one of a small number of states that will determine the outcome of the election on November 5, and it is possible that the entire outcome will be determined by this state.
The Committee on Foreign Investment in the United States, an interagency body that was established to evaluate foreign takeovers of US firms, is expected to review the agreement.
A White House official stated that the President has not received a recommendation from CFIUS, which is the subsequent phase in the process.United States Steel issued a warning on Wednesday that it may close its headquarters and factories in Pennsylvania, a critical swing state in the November election, if an acquisition by Japan’s Nippon Steel is not approved.
A White House official stated that the President has not received a recommendation from CFIUS, which is the subsequent phase in the process.
