(Bloomberg) -- United States Steel Corp. surged the most this year after the Washington Post reported President Joe Biden wouldn’t immediately move to block Nippon Steel Corp.’s takeover bid.
While Biden remains opposed to the deal, a decision on blocking it is unlikely in the short term and may not be made until after the presidential election, the newspaper reported, citing people familiar with the matter.
US Steel shares surged as much as 10%, the steepest intraday gain since Dec. 18 — the day the deal was first announced.
The gain had pared to 5% at 1:03 p.m. in New York, as White House spokeswoman Saloni Sharma disputed that there’d been a change of plans, saying an announcement was never imminent. “The President’s position is that it is vital for US Steel to remain an American steel company that is domestically owned and operated.”
Biden was preparing to kill the deal once a referral from the Committee on Foreign Investment in the United States, or CFIUS, reaches his desk, people familiar with the matter said last week.
The current deadline for a CFIUS decision is Sept. 23, people familiar with the matter said. An extension would push the latest date for a decision past the election.
“The President told our steelworkers he has their backs, and he meant it,” Sharma said. “As we made clear last week, we have not received any recommendation from CFIUS.”
Nippon and US Steel have been making last-ditch efforts to win over workers and politicians for the $14.1 billion acquisition. This week, the two companies unveiled their correspondence with the USW to show how union leaders snubbed efforts to negotiate an agreement.
That’s after the Pittsburgh-based company came out and warned that plants could be shut down if the sale fell through, prompting some workers to voice their support for a new owner.
But the United Steelworkers union said in a memo Thursday it won’t be bullied, calling the deal “doomed” and pledging to fight any foreign ownership.
US Steel and Nippon Steel pointed to the $2.7 billion of investments the deal would bring, saying that will benefit workers, local communities and national security.
(Updates with additional White House comment, CFIUS deadline)
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