Joe Biden blocks US Steel sale over safety fears

US Steel’s £11.4billion sale to a Japanese rival has been blocked by Joe Biden on national security grounds.

Shares in the American giant fell around 7 per cent in response to the outgoing US president’s decision to block the sale to Nippon Steel Corporation.

Biden said that a strong, US-owned and operated steel industry was critical to national security, its infrastructure, supply chains and key economic sectors such as car manufacturing and defence.

He first signalled his opposition to the deal in March and yesterday said: ‘This acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains. 

‘So, that is why I am taking action to block this deal. US Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers.’

Even if Biden had unexpectedly waved the deal through, as he had been urged to by both steel companies and the Japanese government, incoming president Donald Trump had vowed to block it.

Opposition: Joe Biden said that a strong, US-owned and operated steel industry was critical to national security

Although the deal, which was announced over a year ago, has been killed off, it may not be the end of the matter for US Steel and Nippon Steel. The terms of the deal included a £455m break fee clause, payable by Nippon to US Steel in the event that it failed to secure regulatory approvals.

Nippon chief executive Eiji Hashimoto has been reported in the Japanese press as being willing to sue the US government for political interference in the deal.

The US government’s intervention is in marked contrast to Britain’s recent approach to foreign takeovers.

Labour nodded through the takeover of Royal Mail by Czech billionaire Daniel Kretinsky, while its steel sector is largely foreign owned.

Yesterday, it emerged that British Steel has received a £360m loan from its Chinese owner Jingye in November.

The Government has been holding talks with Jingye over the future of British Steel’s sites in Scunthorpe and Teeside. The Chinese company wants taxpayer support to build green electric arc furnaces at the two sites.

However, as part of its worst-case scenario planning, the Government has reportedly looked into nationalising British Steel if the talks fail.