U.S. Steel CEO David Burritt addressed the company’s planned sale to Japan’s Nippon Steel on Tuesday, asserting that the transaction will proceed based on its merits, despite opposition from President Joe Biden. Burritt, in an interview on CNBC’s “Money Movers,” emphasized the benefits of the deal, highlighting its contributions to national, economic, and job security.
President Biden has vowed that U.S. Steel will remain under American ownership, with sources indicating to NBC News that the president is preparing to block the $14.9 billion sale. Vice President Kamala Harris and former President Donald Trump also oppose the sale.
Burritt pointed out that Nippon North America has conducted business in the U.S. for 50 years and emphasized that the success of U.S. Steel relies on Nippon’s involvement. He noted that the transaction would preserve jobs and cited Nippon’s pledge to invest $2.7 billion in U.S. Steel’s ailing mills as a positive outcome. Responding to why U.S. Steel cannot make these investments independently, Burritt explained the company’s obligation to its shareholders and the need for prudent resource allocation. He highlighted Nippon’s scale and advanced R&D capabilities, which surpass those of U.S. Steel.
The sale is being reviewed by the Committee on Foreign Investment in the United States (CFIUS), which assesses the national security implications of foreign transactions. Burritt expects a decision post the U.S. presidential election in November. CFIUS has expressed concerns that the sale could reduce domestic steel production capacity, potentially disrupting supply chains in critical sectors like transportation, infrastructure, construction, and agriculture, as noted in a letter obtained by Reuters.
Burritt dismissed national security concerns, assuring that the agreement would adhere to U.S. trade laws. He also mentioned that the company would be managed by U.S. citizens with a predominantly American board of directors.
