Japan’s Nippon Steel China Assets under Scrutiny over US Steel Deal, Bloomberg Reports

Reuters

12:23 JST, February 23, 2024

Feb 22 (Reuters) – The Biden administration is examining Nippon Steel’s 5401.T China connection, in relation to the Japanese company’s planned acquisition of American rival U.S. Steel X.N, Bloomberg News reported on Thursday, citing people familiar with the matter.

The administration sees protecting the U.S. industry as its priority and is worried about Nippon Steel’s exposure to China, the report said.

It is not clear whether the China assets of Nippon Steel will be an explicit part of the Committee on Foreign Investment in the United States (CFIUS) review, the report said.

The world’s fourth-largest steelmaker’s $14.9 billion deal to buy U.S. Steel has drawn criticism from some of the Democratic and Republican lawmakers and the powerful United Steelworkers union.

The White House has also promised “serious scrutiny” of the deal given the company’s role in U.S. steel production, which the government regards as critical to national security.

When contacted by Reuters, Nippon Steel said its operations in China are very limited – representing less than 5% of the company’s global production capacity.

“Our goal is to enhance U.S. Steel’s competitiveness in the global steel market and address the industry’s overproduction and overcapacity issues – largely driven from China,” it added.