AFP – United States (US) Steel warned on Wednesday it could shut its headquarters and factories in Pennsylvania, a key swing state in November’s election, if a takeover by Japan’s Nippon Steel is blocked.
At a rally in downtown Pittsburgh, backers of the deal touted the transaction as a lifeline to one of western Pennsylvania’s defining industries.
But shares of US Steel sank almost 17.5 per cent following a Washington Post report that President Joe Biden plans to block the deal.
Bloomberg News quoted unnamed sources with the same information.
In December, US Steel sealed a USD14.9-billion agreement to sell itself to Nippon, which has promised investments to keep Pennsylvania factories competitive and newer “mini mills” in the American South.
But the transaction has faced an avalanche of political opposition following its condemnation by the United Steelworkers (USW) union, which on Wednesday dismissed the Pittsburgh rally as an “increasingly desperate” gambit.
The company laid out what Chief Executive David Burritt described as “unavoidable” negative consequences for the Pittsburgh region if the deal is killed. “Without the Nippon Steel transaction, US Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk,” the company said in a statement.
