According to the Zhichun Finance APP, informed sources have revealed that Nippon Steel proposed granting the U.S. government veto power over capacity reductions at United States Steel (X.US), which is the company's final effort to gain U.S. government approval for its acquisition of United States Steel. Informed sources stated that this proposal aims to address the concerns raised by the U.S. Committee on Foreign Investment (CFIUS). Last week, CFIUS indicated that Nippon Steel's acquisition of United States Steel would lead to a decrease in United States Steel production.

As a result of this news, United States Steel saw a temporary increase of 14% during trading on Tuesday, marking its largest gain since December 2023. United States Steel closed up 9.54% on Tuesday at $33.99, still far below the $55 per share acquisition Quote by Nippon Steel.

For most of 2024, CFIUS has been reviewing this proposed acquisition. It is reported that CFIUS has not reached a clear conclusion on whether Nippon Steel's acquisition of United States Steel poses a threat to National Security. Last Monday, CFIUS submitted its decision on whether to approve the transaction to President Biden, who will have 15 days to make a decision.

Biden has long expressed opposition to the transaction and stated that United States Steel will continue to be owned and operated domestically. White House spokesperson Saloni Sharma stated, "From the beginning, the President's stance has been that United States Steel is critically important to be owned and operated domestically." "CFIUS's review process has been ongoing in the past and continues to do so now."

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In December 2023, the world's fourth-largest steel manufacturer, Nippon Steel, announced that it would acquire United States Steel for $14.9 billion in all cash, with an acquisition price of $55 per share. Well-capitalized Nippon Steel hopes to expand its footprint in the U.S. through this acquisition, strengthen its position as a global giant, and use overseas expansion to address weakened domestic demand. This acquisition is also expected to raise the company's global crude steel production capacity to 0.1 billion tons.

However, since the announcement, this acquisition plan has repeatedly encountered setbacks, facing unanimous opposition from the Biden administration, the United States Steel Workers Union (USW), and the incoming Trump administration. They generally oppose foreign ownership of United States Steel because the steel produced by the company is an important CSI Commodity Equity Index used for constructing Ships, trains, and infrastructure. The union is also concerned that this deal will lead to job losses.

Nippon Steel stated that this transaction would benefit the U.S. economy and employment and aligns with the policy to compete with other steel manufacturers. Nippon Steel previously mentioned that it would invest billions of dollars in United States Steel, which would 'undoubtedly' enable it to 'maintain and possibly increase domestic steel production capacity' in the U.S. Nippon Steel also reiterated that it would not transfer any production capacity or jobs from United States Steel Overseas, nor interfere with any decisions made by United States Steel on trade issues, including decisions to take trade measures against unfair trade practices under U.S. law.

Despite the political pressure surrounding this transaction, Nippon Steel has been working to garner support for months. Earlier in November, Nippon Steel expressed that it still expects to complete the acquisition of United States Steel by the end of the year. The latest news indicates that Nippon Steel announced a plan on Tuesday, stating that if the acquisition is completed, the company will provide a $5,000 bonus to each United States Steel employee.

United States Steel indicated that this transaction represents a lifeline. The company warned that if the deal fails, it may relocate its headquarters out of Pennsylvania and close some business operations.