Blocking Nippon Steel’s Acquisition of U.S. Steel

The news organizations in Japan concurrently reported that the U.S. President Joe Biden would block Nippon Steel’s acquisition of U.S. Steel and Nippon Steel, quoting reports of U.S. news media. It is supposed that the decision of Biden will be made for supporting Kamara Harris, Vice-President and Democratic candidate for the next President, expecting more support from labor union. It is supposed that the blocking may damage the management of both companies.

Nippon Steel announced its $14.1 billion deal to acquire U.S. Steel last December, which would make the third biggest steel maker in the world. While it was expected to contribute to enhance economic security of both countries, labor union, United Steelworkers, opposed the deal, being afraid of further shutdown of ironworks. Biden administration started researching the impact of the acquisition on U.S. security.

 

It was January when the deal made a political dispute. Former President Donald Trump, expecting his presidential bid in the election this fall, announced that he would immediately block the deal, trying to attract the voters working for the steel company. Biden followed Trump, as then hopeful candidate for his second term, saying “It is important that we maintain strong American steel companies powered by American steel workers.” Acquisition of U.S. Steel by Nippon Steel became an issue for the presidential campaign.

 

The issue was succeeded from Biden to Harris. Even after the shareholders approved the deal and Nippon Steel postponed the acquisition from September to December, Harris made it clear that she would be against the acquisition plan. President Biden has been waiting for a recommendation from the Committee on Foreign Investment in the United States (CFIUS) on whether the deal would affect US security.

 

Washington Post revealed that Biden was preparing for blocking the acquisition and Reuters reported that CFIUS had sent Nippon Steel a letter noting that the acquisition could “lead to a reduction in domestic steel production capacity.” Biden administration may announce its decision as soon as within this week.

 

Nippon Steel concerns the impact of Biden’s action on the deal. “Nippon Steel believes that a fair and objective regulatory review process will support this outcome, and looks forward to closing the transaction as soon as possible,” said the press release of Nippon Steel. Washington Post reported a comment of U.S. Steel’s CEO that the deal’s collapse would put at risk thousands of good-paying union jobs. The reports caused major decline of U.S. Steel’s stock price.

 

If Nippon Steel abandons the deal, it will cause $565 million of compensation as penalty for breaching contract. “It is indispensable for Japan and U.S. to enhance economic relationship, including expansion of investment between them,” said Chief Cabinet Secretary Yoshimasa Hayashi. However, Kishida administration in lame duck period does not show any diplomatic action on the issue.

Comments

Post a Comment

Popular posts from this blog

Amendment of Local Autonomy Law

The House of Representatives started discussion on revision of the Local Autonomy Law, which would vest the national government a power to instruct local government in an emergency. It may change the relationship between the national and local government, which has been recognized as equal. The opposition parties oppose the amendment, arguing that it would give the national government an excessive power.   With the Meiji Restoration, the national government abolished the feudal system, introducing modern governance. However, its autonomy was not sufficient. The governor of each prefecture was appointed by the national government. The local governments subordinated to the national government. It was as late as 2000 when  the Comprehensive Decentralization Law  was enacted and the relationship between the national and local government was defined as equal.   The national government found inconvenience in the relationship between the national and local government, when COVID-19 was preval
Read more

Request for Final Nuclear Disposal Site

Ministry of Economy, Trade and Industry requested Genkai Town, Saga, to accept “literature survey” for building a final disposal site for high-level radioactive waste. Genkai is going to answer within this month. If it accepts, it will be the third place to accept that survey, following two places in Hokkaido. Main reason to accept the survey is supposed to be subsidy from the national government.   Japan has no final disposal site. Among all 54 reactors in 17 nuclear power generation plant, 12 reactors of 6 plants are operating. The rest of them are not in operation, some of which are determined to be decommissioned. Used nuclear fuels are stocked in each plant, 　 or have sent to a reprocessing plant in Rokkasho, Aomori. There are two plans to stock nuclear wastes in the intermediate facility for disposal, one is already built and another is still in negotiation.   Nuclear Fuel Final Disposal Act in 2000 determines to bury nuclear waste in the underground. Literature survey, which is
Read more

Death Penalty Demanded on Criminal of Arson

On the historically brutal case of arson, the public prosecutors demanded an ultimate penalty to the offender. In the trial on the arson and murder in Kyoto Animation in 2019, the prosecutors requested death penalty on the defendant, Shinji Aoba. The lawyers of Aoba argued that the court should avoid sentencing death penalty. The judgement will be passed next January. Aoba was indicted as putting fire after pouring gasoline in the building of Kyoto Animation (Kyoani), a studio producing animation works, and killed 36 staffs and injured 32 on July 18 th , 2019. In the trial, Aoba argued that he could not tolerate Kyoani, because it had stolen his novel story in its works. Aoba later apologized to the victim’s families that he had done too much and regretted it.   In the closing argument in Kyoto Regional Court, the prosecutors demanded death penalty for Aoba, because the number of victims were extremely high in the history of criminal trials in Japan. “It is hard to describe about how t
Read more