Nippon Steel Corp.'s (OTC:NPSCY) lawsuit challenging President Joe Biden's block of its $14.9 billion acquisition of US Steel Corp. (NYSE:X) faces steep legal hurdles but could buy time for alternative deal structures, legal experts say.
The Japanese steelmaker filed suit Monday claiming Biden violated constitutional due process rights by prejudging the deal through the Committee on Foreign Investment in the United States review.
The companies allege Biden's March opposition aimed to secure union support in Pennsylvania before leaving the ticket.
While courts typically defer to executive branch national security decisions, the lawsuit could extend negotiations beyond the current 30-day unwinding period through Jun. 18, when regulatory approvals expire, reported Reuters. This extension might prove crucial as former President Donald Trump, who initially opposed the deal, could take office in 2025.
"The lawsuit will give them more time to negotiate with the new administration or find alternatives that are acceptable," said Nick Klein, national security lawyer at DLA Piper, though he called the legal challenge "an uphill battle."
The White House denies allegations of political motivation in blocking the merger.
Price Action: United States Steel stock closed at $32.95 on Monday, up 8.17% for the day. In after-hours trading, the stock gained an additional 0.58%. Over the past year, the stock has declined by 32.05%, according to data from Benzinga Pro. Nippon Steel stock is currently trading at JPY 3,106, down 1.65% at the time of writing. Over the past year, it has dropped 6.98%.
