Nippon deadline extended as new bid emerges

HARRISBURG, Pennsylvania — The bid by Japan's Nippon Steel to buy US Steel may have a new lease of life after the US administration extended a deadline for the Japanese steelmaker to abandon plans to acquire US Steel.

The new deadline, now in mid-June, was viewed by US Steel — and investors, apparently — as an opportunity for the companies to complete the acquisition, even though President-elect Donald Trump, who takes office in a week, also opposes the deal.

US President Joe Biden blocked the deal this month, citing a potential threat to national security, though the US Committee on Foreign Investment in the United States failed to reach a consensus on the security issue.

Both Nippon Steel and US Steel have insisted that the deal presents no national security problem for the US, and said Biden's decision to block it was a violation of legal due process and a political calculation.

Japanese Prime Minister Shigeru Ishiba said on Monday that "strong "concerns have been raised over the blocking of Nippon Steel's takeover bid, local media reported.

"I said that strong voices of concerns are being raised not just in Japan but also in the US business community, and I urged (Biden) to dispel these feelings," Ishiba said after a call with Biden and Philippine President Ferdinand Marcos.

Zhang Miao, an associate professor at the Research School for Southeast Asian Studies at Xiamen University, told China Daily: "In substantive economic cooperation, Japan has not received preferential treatment. On the contrary, the US has repeatedly obstructed significant investment and acquisition projects."

"The painful lessons of the Plaza Accord and Japan's Lost Decade serve as a stark reminder of how the US consistently prioritizes its own interests above all else. When necessary, it will sacrifice the interests of its allies," Zhang said.

At allies' costs

"This has long been a hallmark of US foreign policy, often leaving its allies to bear steep and unilateral costs," she added.

Wu Zelin, an associate research fellow at the Institute of International Relations at the Shanghai Academy of Social Sciences, said cross-border acquisitions by multinational corporations are not purely business matters. When they involve a country's core pillar industries, they often escalate into so-called "political and security issues".

The proposed deal between Nippon Steel and US Steel kicked up an election-year political maelstrom across the US industrial heartland and quickly drew vows from Biden and Trump from the campaign trail in a critical battleground state to block the deal.

Even after the election, Trump wrote on social media in December that he was "totally against" US Steel being bought by a foreign company and said he would block the deal as president. He reiterated that stance after it was blocked by Biden.

In a development that may further complicate the situation, a new bid for the storied Pittsburgh steelmaker began to emerge on Monday.

Lourenco Goncalves, the chief executive officer of Ohio-based steelmaker Cleveland-Cliffs, said in a news conference on Monday that he wanted to make a new bid for US Steel, which accepted the buyout offer from Nippon in 2023 after it rejected an offer by Cleveland-Cliffs.

Goncalves declined to give financial details about the bid but said in a news conference at a Cleveland-Cliffs plant in western Pennsylvania that it is an "all-American solution "to save US Steel. He said he would relocate Cleveland-Cliffs' headquarters to Pittsburgh, keep the US Steel name and make Cleveland-Cliffs part of US Steel.

Commenting on this, Wu said the new rival bid by Cleveland-Cliffs has further complicated the situation, and much will be left to Trump, who will take office within a week.

Shao Xinying in Beijing contributed to this story.

Agencies Via Xinhua