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U.S. Steel and Nippon Sue Biden Over Decision to Block Deal

U.S. Steel and Nippon Sue Biden Over Decision to Block Deal

The companies also filed a separate lawsuit against Cleveland-Cliffs, an American steel company that previously tried to buy U.S. Steel but was rebuffed, along with Lourenco Goncalves, chief executive of Cleveland-Cliffs, and David McCall, international president of the powerful union United Steelworkers. The lawsuit alleged that Cleveland-Cliffs and the head of the union illegally colluded to undermine the proposed deal between U.S. Steel and Nippon Steel.

The legal actions represented a long-shot maneuver by the companies to preserve a deal that was ensnared in election year politics. Presidents have broad authority to determine what constitutes a national security threat, and no transaction blocked under those powers has ever been overturned by the courts.

However, Mr. Biden’s move to terminate Nippon’s $14 billion bid for U.S. Steel raised questions about whether those powers were being abused, given that Japan is a close ally of the United States. In the rare cases where deals have been blocked, they usually involved companies with ties to U.S. adversaries such as China.

“Nippon Steel and U.S. Steel are disappointed to see such a clear and improper exploitation of the country’s national security apparatus in an effort to help win an election and repay political favors,” the companies said in a statement on Monday. “Nippon Steel and U.S. Steel are entitled to a fair process and have been left with no choice but to challenge the decision and the process leading to it in court.”

The lawsuit against the Biden administration was filed in the U.S. Court of Appeals for the District of Columbia Circuit. The suit also names Treasury Secretary Janet L. Yellen, who chairs the Committee on Foreign Investment in the United States, and Merrick Garland, the attorney general.

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