Nippon Steel Corporation, together with its wholly owned subsidiary Nippon Steel North America, Inc. and United States Steel Corporation jointly filed two lawsuits to remedy the ongoing illegal interference with Nippon Steel’s acquisition of U. S. Steel.
The companies commented on the litigation:
“From the outset of the process, both Nippon Steel and U. S. Steel have engaged in good faith with all parties to underscore how the Transaction will enhance, not threaten, United States national security, including by revitalizing communities that rely on American steel, bolstering the American steel supply chain, and strengthening America’s domestic steel industry against the threat from China. Nippon Steel is the only partner both willing and able to make the necessary investments – including no less than $1 billion to Mon Valley Works and approximately $300 million to Gary Works as part of the $2.7 billion committed – to protect and grow U. S. Steel for the benefit of employees, the communities in which it operates, and the entire American steel industry. Today’s legal actions demonstrate Nippon Steel’s and U. S. Steel’s continued commitment to completing the Transaction – despite political interference with the CFIUS process and the racketeering and monopolistic conspiracies of Cleveland-Cliffs and USW president David McCall – for the benefit of all stakeholders, including U. S. Steel’s shareholders, who will receive the agreed upon $55.00 per share upon the Transaction closing. We remain confident that the Transaction is the best path forward to secure the future of U. S. Steel – and we will vigorously defend our rights to achieve this objective.”
The litigation brought by the companies will establish that:
President Biden ignored the rule of law to gain favor with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and support his political agenda;
As a result of President Biden’s undue influence to advance his political agenda, the Committee on Foreign Investment in the United States (CFIUS) failed to conduct a good faith, national security-focused regulatory review process, depriving Nippon Steel and U. S. Steel of their rightful opportunity for fair consideration of the Transaction; and
Cleveland-Cliffs Inc., in collusion with the leadership of the USW, has sought to prevent the transaction from closing and any party other than Cliffs from acquiring U. S. Steel, and to otherwise injure U. S. Steel’s ability to compete, all as part of a broader illegal campaign to monopolize the domestic steel markets.
The litigation involves two cases:
First, U. S. Steel, Nippon Steel, and NSNA filed a petition in the United States Court of Appeals for the District of Columbia Circuit challenging the violation by President Biden and CFIUS of the Petitioners’ constitutional due process and statutory rights; CFIUS’s failure to review the Transaction on national security grounds; and President Biden’s subsequent order blocking it for purely political reasons which are irrelevant to, and are to the detriment of, United States national security. The Petition asks the Court to set aside the unlawful CFIUS review process and President Biden’s accompanying Order, and to instruct CFIUS to conduct a new review of the Transaction that is consistent with Petitioners’ due process rights and its own statutory obligations.
Second, U. S. Steel, Nippon Steel, and NSNA filed a complaint and motion for a preliminary injunction and for an expedited hearing in the United States District Court for the Western District of Pennsylvania against Cliffs, Cliffs’ chief executive officer Lourenco Goncalves, and USW president David McCall for engaging in a coordinated series of anticompetitive and racketeering activities illegally designed to prevent any party other than Cliffs from acquiring U. S. Steel as part of an illegal campaign to monopolize critical domestic steel markets. The Complaint seeks an injunction preventing Cliffs, Mr. Goncalves, and Mr. McCall from engaging in further collusive and anticompetitive behavior, and to impose substantial monetary damages for their conduct.
These legal actions are necessary to protect Nippon Steel’s and U. S. Steel’s right to proceed with their Transaction, free from illegal and improper political and anticompetitive interference. Given the obstruction thus far that prevented closing the Transaction, Nippon Steel and U. S. Steel intend to press ahead with both the Petition and Complaint as swiftly as practicable and are pursuing both cases on an expedited basis.
Nippon Steel and U. S. Steel are confident that the companies have strong cases and will close the transaction and deliver $55.00 per share for U. S. Steel’s stockholders.
