Japan PM Ishiba urges Biden to approve Nippon-US Steel deal, sources say
Biden has opposed Nippon Steel's $15 billion U.S. Steel acquisition
CFIUS deadline to review deal set before Trump takes office
Ishiba emphasises Japan investment in U.S., strengthened Japan-U.S ties
Adds details and context from paragraph 7
By Tim Kelly, David Dolan and Aishwarya Jain
TOKYO, Nov 26 (Reuters) -Japanese Prime Minister Shigeru Ishiba has sent a letter to President Joe Biden asking him to approve Nippon Steel's acquisition of U.S. Steel, to avoid marring recent efforts to strengthen ties between the countries, according to two sources familiar with the matter.
Biden joined a powerful U.S. labour union in opposing the $15 billion takeover of the storied American firm by Japan's top steelmaker and referred it to the Committee on Foreign Investment in the United States (CFIUS), a secretive government panel that reviews foreign investments for national security risks.
The deadline for the CFIUS review is next month, before President-elect Donald Trump - who has vowed to block the deal - takes office on Jan. 20. CFIUS could approve the deal, possibly with measures to address national security concerns, or recommend that the president block it. It could also extend the review.
"Japan stands as the largest investor in the U.S., with its investments showing a steady upward trend. Continuing this upward trend of Japanese investment in the U.S. benefits both of our countries, showcasing the robustness of the Japan-U.S. Alliance to the world," Ishiba said in the letter, according to a copy of the text seen by Reuters. The sources confirmed it was sent to Biden on Nov. 20.
"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," the letter said.
The U.S. embassy in Japan declined to comment. Ishiba's office deferred questions to the foreign ministry which did not immediately have comment. Nippon Steel declined to comment and U.S. Steel did not immediately reply to a request for comment outside of U.S. business hours.
CHANGE IN APPROACH
Ishiba's direct approach appears to mark a shift in the Japanese government's stance on the deal, which became a political hot potato in a key U.S. swing state in the lead-up to the Nov. 5 presidential election.
Ishiba's predecessor, Fumio Kishida, had sought to distance his administration from the controversial takeover, casting it as a private business matter even as U.S. political opposition mounted.
The tie-up appeared set to be blocked when CFIUS alleged in a letter sent to the companies on Aug. 31 that the transaction posed a risk to national security by threatening the steel supply chain for critical U.S. industries.
But the review process was eventually extended until after the election to give the panel more time to understand the deal's impact on national security and to engage with the parties, a person familiar with the matter said.
Before Ishiba took office on Oct. 1, he said any U.S. move to block the deal on national security grounds would be "very unsettling" given the close relations between the allies.
Ishiba and Biden met for the first time as leaders on the sidelines of an international summit in Peru earlier this month.
Ishiba's letter said the pair were not able to dive into discussions on the economic relationship at that meeting due to time constraints, and that he wanted to follow up to bring his attention to the deal at a "critical juncture".
Nippon Steel has made various guarantees and investment pledges in order to win approval.
Ishiba reiterated in his letter to Biden that the deal would benefit both countries.
"Nippon Steel is deeply committed to protecting U.S. Steel workers and opening up a prosperous future together with U.S. Steel and its workers," Ishiba said.
"The proposed acquisition will enable Japanese and U.S. steel companies to combine advanced technologies and increase competitiveness, and will contribute to enhancing steel production capacity and employment in the United States."
It was not clear if Biden had replied to the letter.
Reporting by Tim Kelly, David Dolan and John Geddie in Tokyo; Aishwarya Jain in Bangalore; Writing by John Geddie; Editing by Edmund Klamann
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
