Japan's PM asks Biden to greenlight Nippon's acquisition of US steel - report

Investing.com -- Japanese Prime Minister Shigeru Ishiba has written to President Joe Biden, urging him to approve Nippon Steel Corp (TYO:5401 )'s $15 billion bid to acquire US Steel , Reuters reported Tuesday, citing sources familiar with the matter.

Ishiba's appeal aims to prevent the deal’s rejection from straining recent efforts to strengthen US-Japan relations.

Biden, aligning with a major US labor union, has opposed the deal and referred it to the Committee on Foreign Investment in the United States (CFIUS). The committee, which evaluates foreign investments for potential national security risks, is expected to reach a decision next month before President-elect Donald Trump takes office on January 20.

Trump has publicly stated his intention to block the acquisition. CFIUS could approve the transaction with conditions to mitigate security concerns, recommend it be blocked, or extend the review process further.

In his letter, dated November 20 and reportedly seen by Reuters, Ishiba emphasized Japan’s role as the largest investor in the US, highlighting the mutual benefits of continued Japanese investments.

"Japan stands as the largest investor in the US, with its investments showing a steady upward trend. Continuing this upward trend of Japanese investment in the US benefits both of our countries, showcasing the robustness of the Japan-US Alliance to the world," the letter stated.

Ishiba also praised Biden’s leadership in strengthening bilateral relations over the past four years, calling on the administration to approve the deal to preserve these achievements.

"Under your presidency, this Alliance has reached unprecedented strength. We respectfully ask for the U.S. government to approve the planned acquisition by Nippon Steel so as not to cast a shadow on the achievements you have accumulated over the past four years," Ishiba wrote.

The US embassy in Japan declined to comment on the matter, Reuters said.

Ishiba’s direct appeal signals a shift in Japan’s approach to the politically sensitive deal, which has drawn significant attention in the US, particularly in swing states, during the lead-up to the November 5 election.

CFIUS raised concerns about the acquisition in an August 31 letter to the companies, suggesting it could pose a risk to national security by jeopardizing the steel supply chain critical to US industries. However, the review process was extended beyond the election to allow the committee more time to assess the deal’s implications and work with the involved parties, the report said.

Before taking office on October 1, Ishiba expressed concern that blocking the deal on national security grounds would be "very unsettling" given the close ties between the US and Japan.

He and Biden briefly met as leaders for the first time during a recent summit in Peru but were unable to delve into the specifics of their economic relationship. In his letter, Ishiba described the acquisition as being at a "critical juncture" and expressed his desire to follow up on the matter.

Source: Investing.com