U.S. Steel's stock drops as Biden speaks against buyout by Japan's Nippon Steel

By Steve Gelsi and Tomi Kilgore

Stock extends losses after President Biden says it's 'vital' for the business to remain in American hands

United States Steel Corp.'s stock is heading lower for the second straight day on Thursday after President Joe Biden said he's opposed to the proposed $14 billion purchase of the company by Japan's Nippon Steel.

"It is important that we maintain strong American steel companies powered by American steel workers," Biden said in a prepared statement. "I told our steel workers I have their backs, and I meant it. U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated."

U.S. Steel's stock (X) fell by 4.3% on Thursday. The stock fell 12.8% on Wednesday, when reports of the pending statement by Biden initially surfaced.

The stock is trading below where it closed before the deal was announced on Dec. 18.

It has tumbled 17.8% amid a five-day losing streak, which would be the worst such stretch for the stock since it plunged 20.1% over the five days that ended Sept. 16, 2022.

The latest statement from Biden came after he warned in December that the deal should get close scrutiny by U.S. regulators. The deal has also been criticized by Republicans and Democrats on Capitol Hill.

Nippon Steel (JP:5401) (NPSCY)said on Dec. 18 that it would pay $55 a share in cash for U.S. Steel.

Under the deal, U.S. Steel would keep its headquarters in Pittsburgh and retain its "iconic name." The company was founded by John Pierpont Morgan in 1901 through the merger of several companies, including Andrew Carnegie's Carnegie Steel Company.

U.S. Steel said in August it would explore options for its business after it rejected a takeover offer from Cleveland-Cliffs Inc. (CLF).

U.S. Steel Chief Executive David Burritt said the company was "coming down the other side of the mountain" after a ramp-up in capital spending.

Anticipating political roadblocks, U.S. Steel and Nippon Steel have set up a website, www.BestDealforAmericanSteel.com.

On a conference call with analysts, the companies said they see the antitrust review of the deal as a "low-level risk," because the deal will increase competition in the U.S. "with a great ally to the United States."

U.S. Steel did not immediately reply to an email from MarketWatch.

-Steve Gelsi -Tomi Kilgore

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