TOKYO & PITTSBURGH - Nippon Steel Corporation (TSE: 5401) and United States Steel Corporation (NYSE: NYSE:X), together known as the Companies, have initiated legal proceedings in response to the blocked acquisition of U.S. Steel by Nippon Steel. The Companies have filed two separate lawsuits seeking to counteract what they deem as unlawful interference with the transaction.
The first lawsuit, lodged in the U.S. Court of Appeals for the District of Columbia Circuit, challenges President Biden's order and the CFIUS review process, alleging violations of due process and statutory procedural requirements, as well as claims of undue political influence. The Companies are requesting the court to nullify the CFIUS process and President Biden's order, and to mandate a new review consistent with their legal rights.
The second lawsuit, filed in the U.S. District Court for the Western District of Pennsylvania, accuses Cleveland-Cliffs (NYSE:CLF), its CEO Lourenco Goncalves, and USW President David McCall of engaging in anticompetitive and racketeering activities. The Companies assert that these actions were intended to prevent the acquisition and to undermine U.S. Steel's competitive position. The lawsuit seeks an injunction to halt these alleged collusive behaviors and substantial monetary damages.
The Companies assert that the legal actions are essential to complete the transaction, which they argue would benefit U.S. Steel's employees, communities, shareholders, and customers. They maintain that the acquisition would not threaten U.S. national security but rather strengthen America's steel industry against international competition, particularly from China. They also claim that Nippon Steel is prepared to invest significantly in U.S. Steel's facilities, underscoring their commitment to the deal. With annual revenue of $61.5 billion and strong financial metrics including a healthy current ratio of 1.97 and modest debt-to-equity of 0.52, InvestingPro data suggests Nippon Steel has the financial capacity to support such investments.
Nippon Steel and U.S. Steel have expressed confidence in their legal positions and intend to pursue the cases expediently. They believe the blocked transaction, which would have provided U.S. Steel's shareholders with $55.00 per share, is the best path forward for securing U.S. Steel's future. For deeper insights into Nippon Steel's valuation metrics and over 30 advanced financial indicators, investors can access comprehensive analysis through InvestingPro.
The information in this article is based on a press release statement.
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