11:03 AM EST, 01/03/2025 (MT Newswires) -- (Updates with the joint statement released by US Steel and Nippon in the sixth and seventh paragraphs.)

President Joe Biden on Friday blocked United States Steel's ( X ) proposed acquisition by Japan's Nippon Steel, citing national security concerns and supply chain risks.

"A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains," Biden said in a statement. "Without domestic steel production and domestic steel workers, our nation is less strong and less secure."

In December 2023, Nippon agreed to acquire US Steel for $14.1 billion in cash, plus the assumption of debt. The deal's estimated date of closing was pushed to the ongoing quarter from the second half of 2024 initially expected, according to information posted on Nippon's website late in December. President-elect Donald Trump previously vowed to block the transaction.

The Committee on Foreign Investment in the United States recently referred the deal to Biden after failing to reach a consensus on whether to clear it or not. In an attempt to secure Biden's approval, Nippon reportedly offered the US government veto power before the company could reduce production capacity at US Steel's plants, The Washington Post reported on Dec. 31.

"It is my solemn responsibility as President to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company," Biden said Friday.

In a joint statement, US Steel and Nippon said Friday that they were "dismayed" by Biden's decision to block the deal and that the process was "manipulated to advance" the president's political agenda. "The President's statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision," according to the companies.

The companies said they will take "all appropriate action to protect their legal rights." US Steel's stock declined 5.8% in Friday trading.

The Japanese steel giant had previously committed to invest $2.7 billion in US Steel's unionized facilities, but the deal still received pushback from the United Steelworkers union. "According to the press, Nippon says it will allow capacity to be monitored, but once again, it fails to commit to maintaining production for the long term or actually strengthening domestic capacity in integrated facilities," the union said Thursday.

In an emailed statement to MT Newswires, US Steel said the union leaders were misrepresenting several aspects of the Nippon Steel offer and reiterated its view that the transaction was "the best way to ensure" that US Steel, including its employees, "will thrive well into the future."

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