Biden voices concerns about US Steel takeover by Nippon Steel
US Steel (X) shares slide lower this morning after President Biden weighed in on the steel manufacturer's acquisition by Japan's Nippon Steel (NPSCY, 5401.T). Biden stated that it has become increasingly important to "maintain strong American steel companies powered by American steelworkers."
Yahoo Finance Live breaks down Biden's comments.
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Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
- President Biden speaking out against the sale of US Steel to Japan's Nippon Steel, saying the US needs to, quote, "maintain strong American steel companies." That's according to a statement obtained by the AP. And, Seana, just looking at the chart here on the Wi-Fi Interactive, it's year to date. It's down 16%, most of this coming just very recently.
And I think it's instructive. Here's a one-year chart. Never quite got above, what is that, $50? And the purchase price is $55. So I think this just indicates there was always a bit of skepticism over what this deal would bring.
- Yeah, and with Nippon, it's not exactly a massive surprise here. We're extending the losses that we saw yesterday when the stock closed off nearly 13%. But, Jared, you're exactly right to highlight what you have circled there on the screen with shares closing just above $40 a barrel, which is about 30% below what the value was or at the offer price here for this deal.
So there's no outright pledge here to block it from President Biden. But from the reports of the statement that we are going to get later today from President Biden, he is likely to address and bring up some of those serious concerns that he has of US Steel not remaining domestically controlled.
We also have to bring up the political side of it, right?
- Yes.
- Because it is an election year, we know there has been some pushback, some concern amongst the US Steel workers here. So the fact that it has such a large base within Pennsylvania, Pennsylvania is a swing state. You got to think, obviously, that the 2024 election is playing into this.
- You think? I mean, just remember what Donald Trump did with the US Steel headlines four years ago. It was quite in play. Also, real quickly, CFIUS-- that is the Committee on Foreign Investment in the United States-- it is shrouded in secrecy. We don't really know what goes on there. But that's another wild card that we got to at least account for in our considerations.
