Nippon Steel Does Not Rule Out Lawsuit if U.S. Steel Deal Nixed, CEO Says

SEATTLE (Scrap Monster):  Nippon Steel has not ruled out suing the United States government if its proposed acquisition of U.S. Steel gets blocked.

“If this were to fall through without a legitimate reason or proper procedures, of course we would consider taking legal action against the U.S. government,” Chairman and CEO Eiji Hashimoto told Japanese weekly Shunkan Bunshun in a story published Tuesday.

Kayo Kikuchi, a spokesperson for Nippon Steel, told The Japan Times on Wednesday that the reported remarks made by Hashimoto do not indicate the company’s commitment to initiate a lawsuit, and that it does not reflect a change from the company’s aim of completing the deal by the end of 2024.

“It’s more of a metaphorical expression — a readiness or willingness to pursue legal action if necessary, rather than a definitive plan to file a lawsuit,” Kikuchi said, referring to Hashimoto’s remarks.

“It’s not exactly even to the extent of it being a possible option. When we talk about possibilities, a lot of things could be considered, but if we were to initiate a lawsuit, it would naturally require a formal decision-making process. At this stage, it’s not at the level of the board of directors or anything like that,” Kikuchi added.

Nippon Steel’s proposed $14.9 billion deal to purchase the Pittsburgh-based U.S. Steel has met with considerable political resistance.

U.S. President Joe Biden had repeatedly said U.S. Steel should remain American-owned and -operated, while President-elect Donald Trump publicly said he will block the deal once elected.

The purchase is pending review by the Committee on Foreign Investment in the U.S. (CFIUS), which holds broad power to investigate the national security implications of foreign investments and provide recommendations to the president on whether to approve transactions.

In late August, the CFIUS reportedly told Nippon Steel and U.S. Steel that the planned merger poses a national security risk as it may lead to a reduction of production capacity in the United States — a claim that both companies denied. CFIUS later delayed its decision for 90 days until after the Nov. 5 U.S. presidential election, with the deadline now at year-end.

Nippon Steel is currently in the phase of “calmly proceeding” with the CFIUS and antitrust reviews, said Kikuchi, who declined to comment definitively on any possible actions if the deal fails to acquire CFIUS approval.

Hashimoto’s remarks came five days after Nippon Steel Vice Chairman and Executive Vice President Takahiro Mori — the lead negotiator in the U.S. Steel acquisition — said that the company expects to close the deal by year-end and under the current U.S. administration.

“Unless there’s a significant shift in direction, we expect the current administration to make a decision by year-end,” Mori told reporters at the company’s quarterly earnings briefing on Nov. 7.

“With the election now over, we are finally in an environment where we can calmly and properly discuss the essence of this case. I’m confident we’ll be able to close this by year-end,” he added.

In a 2019 article, Quinn Emanuel Urquhart & Sullivan wrote that CFIUS decisions are not subject to judicial review, but the Los Angeles-based law firm did note that limited options might exist. The firm went on to describe a case in which some success was achieved by a Chinese company on procedural due process grounds.

Courtesy: www.japantimes.co.jp