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U. S. Steel, Nippon Steel File Lawsuits Over Blocked Merger

“These legal actions are necessary to protect Nippon Steel’s and U. S. Steel’s right to proceed with their transaction, free from illegal and improper political and anticompetitive interference,” the company said in a statement. 

In one of the actions, filed with the D.C. Circuit Court of Appeals, Nippon and U. S. Steel are asking the court to set aside what they say was an improperly conducted  review by the Committee for Foreign Investment in the U.S. and Biden’s accompanying decision.   

The companies said Biden's order is "the culmination of a months-long campaign to subvert and exploit the United States’ national security apparatus for the purpose of keeping a promise made by the president and his advisers to the USW leadership."

In the other action, filed at the U.S. District Court for the Western Pennsylvania District, the companies accuse Cliffs, its chief executive officer, Lourenco Goncalves, and United Steelworkers International President David McCall of “engaging in a coordinated series of anticompetitive and racketeering activities illegally designed to prevent any party other than Cliffs from acquiring U. S. Steel.” 

“Today’s legal actions demonstrate Nippon Steel’s and U. S. Steel’s continued commitment to completing the Transaction – despite political interference with the CFIUS process and the racketeering and monopolistic conspiracies of Cleveland-Cliffs and USW President David McCall – for the benefit of all stakeholders,” the companies said in a statement. 

“From the outset of the process, both Nippon Steel and U. S. Steel have engaged in good faith with all parties to underscore how the transaction will enhance, not threaten, United States national security, including by revitalizing communities that rely on American steel, bolstering the American steel supply chain, and strengthening America’s domestic steel industry against the threat from China,” they added. 

The accusation prompted a fiery retort from Goncalves, who called the lawsuit is baseless. 

“As of this morning, Nippon Steel and U.S. Steel continue to play the blame game in a desperate attempt to distract from their own failures,” Goncalves said. 

“Today’s lawsuits against the U.S. government, the USW, and Cleveland-Cliffs represent a shameless effort to scapegoat others for U.S. Steel’s and Nippon Steel’s self-inflicted disaster. U.S. Steel’s executives did not get their personal payouts. Now that it is clear that they have miserably failed the very shareholders they always say they work for, they are lashing out with petulance as a result. Once again, bad course of action,” Goncalves said. 

As the heads to court, local leaders in Pennsylvania and Indiana are trying to figure out next steps, especially as U. S. Steel chief executive officer David Burritt previously said a blocked deal could lead to job losses and plant closures. 

But Pennsylvania Gov. Josh Shapiro said he is expecting U.S. Steel to “uphold their commitments to Western Pennsylvania, refrain from threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and at U.S. Steel HQ and their families, and work collaboratively to ensure the future of American steelmaking takes place right here in our Commonwealth.” 

“This matter is far from over – we must find a long-term solution that protects the future of steelmaking in Western Pennsylvania and the workers who built U.S. Steel and built this country,” he said.