Nippon Steel Corp. and U.S. Steel Corp. have initiated a lawsuit against U.S. President Joe Biden, asserting that his decision to impede Nippon Steel’s acquisition plan was influenced by political motives. This joint legal action seeks to overturn Biden's order, which halted the merger, and calls for the Committee on Foreign Investment in the United States (CFIUS) to reassess the proposal for the takeover.

The two corporations are attempting to navigate a challenging situation that involves the United Steelworkers union (USW), which opposes the merger. They argue that Biden's actions were affected by the impending presidential election, reflecting his need for votes, despite significant challenges remaining in the execution of their takeover plan. During a recent press conference, Eiji Hashimoto, Chairman and CEO of Nippon Steel, criticized Biden's intervention as politically charged, suggesting that a proper CFIUS review would have led to a different decision.

Hashimoto emphasized that Biden's stance was likely influenced by Cleveland-Cliffs Inc., a competitor seeking to maintain an edge in the U.S. market. He alleged that Cleveland-Cliffs, with the support of the USW, leveraged its political connections to persuade Biden to block the takeover. Hashimoto claimed that Biden's motives were predominantly driven by political factors, rather than economic or security concerns.

In their lawsuit announcement, Nippon Steel outlined various grievances regarding the CFIUS review process, noting that the USW had expressed support for Biden shortly after he announced his decision to obstruct the acquisition. Hashimoto criticized the expedited request for Nippon Steel's feedback and pointed out that supporters of the deal within the USW were not adequately consulted. The companies have also filed a civil lawsuit against Cleveland-Cliffs and USW leader David McCall, aiming to gather essential evidence to bolster their allegations regarding Biden's political reasoning.

Biden has instructed Nippon Steel to permanently abandon the proposed acquisition within a specified timeframe, which adds urgency to the lawsuit. The companies plan to seek a court injunction by February 2 to halt the execution of Biden's directive while legal proceedings are ongoing. However, experts suggest that the chances of the acquisition proceeding are slim, as previous cases where presidents blocked mergers have rarely been overturned by courts. Legal analysts indicate that Nippon Steel may face difficulties in substantiating its argument, alluding to a lengthy process for evidence gathering in civil cases.