Investing.com-- Nippon Steel Corp (TYO:5401) won an extension in a security review of its $14.1 billion pursuit of United States Steel Corporation (NYSE:X), likely pushing a decision on the deal past the U.S. elections in November, Bloomberg reported on Tuesday.
Nippon Steel will be allowed to revoke and refile its submission to a U.S. security body overseeing the deal, potentially keeping the transaction alive even as President Joe Biden vowed to kill the deal, Bloomberg reported, citing people with knowledge of the matter.
Shares of U.S. Steel rose over 3% in aftermarket trade, following the Bloomberg report.
The takeover has become a key point of contention in the 2024 elections, specifically in battleground state Pennsylvania, where U.S. steel and the United Steelworkers union are based. The labor group has opposed the deal.
While Biden had vocally opposed the deal, he had stopped short of outright killing it, instead deferring the decision to the Committee on Foreign Investment in the United States (Cifus). Nippon Steel requested the body to resubmit its filing, and Cifus agreed, Bloomberg reported.
This effectively resets the 90-day period required by Cifus to make a decision, pushing any potential consensus on the deal past the 2024 elections. Vice President Kamala Harris and former President Donald Trump also oppose the deal.
Nippon Steel’s approach for U.S. Steel- first made in December- came as the Pennsylvania-based steelmaker struggled with years of underperformance. The deal is expected to help revitalize the company, which also needs vast amounts of capital to update its facilities.
Nippon Steel has indicated it plans to pursue a takeover despite government scrutiny.