Biden, Japanese leader decline to say if they talked about Nippon's buyout of U.S. Steel

By Victor Reklaitis

U.S. President Joe Biden and Japanese Prime Minister Fumio Kishida faced questions on the proposed $14 billion buyout at joint news conference

U.S. President Joe Biden and Japanese Prime Minister Fumio Kishida didn't respond to a reporter's question Wednesday about whether they discussed Nippon Steel Corp.'s proposed $14 billion buyout of United States Steel Corp.

Speaking at a joint news conference at the White House, Biden would only say that he stands by his commitment to American workers as well as his commitment to U.S. allies. The president had come out forcefully against the Japanese steel giant's (JP:5401) planned acquisition of U.S. Steel (X) in mid-March - sending the iconic American company's stock sharply lower as traders bet the deal is likely dead.

Kishida, for his part, would only say Wednesday that he hopes discussions between the parties in the proposed deal "will unfold in directions that would be positive for both sides."

The Japanese leader also stressed that his country's businesses employ close to 1 million workers in the U.S., and that "investment from Japan to the U.S. can only increase upwards in the months and years to come."

While analysts had predicted that reporters would ask about the steel deal ahead of Wednesday's news conference, the two leaders otherwise didn't say much about the matter.

The focus of Kishida's visit to Washington would primarily be the "U.S.-Japan alliance and defense cooperation rather than on the deal," Raymond James analysts said in a note. The Japanese prime minister's low approval ratings "will likely provide strong incentives for him to play it safe with sensitive issues like the deal," the analysts added.

Read more: Biden meets Japan's Kishida amid shared concerns about China, differences on U.S. Steel deal

Senior Biden administration officials had played down how the proposed deal might figure in Wednesday's talks.

"The relationship between the United States and Japan is far bigger and more significant than a single commercial deal," one administration official told reporters ahead of the joint news conference.

As MarketWatch's Chris Matthews noted last month, U.S. presidents have authority to block foreign purchases of U.S. assets on national-security grounds - but they're not intended to make their decisions until after the Committee on Foreign Investment in the United States, or CFIUS, comes to an impartial conclusion on a takeover's national-security implications.

The presumptive 2024 Republican nominee, former President Donald Trump, vowed in January to block the acquisition by Nippon if he's elected in November, and a bipartisan coalition of lawmakers - many from swing states where steelworkers are concentrated - have also come out against the deal. The United Steelworkers, a union that has endorsed Biden's re-election bid, has been voicing objections to the takeover, as well.

Investors have shown that they doubt the deal will go through, as U.S. Steel's stock has been trading around $42 - well below the $55-per-share price that Nippon promised to pay in December.

U.S. Steel shareholders are scheduled to vote Friday on Nippon's planned takeover.

-Victor Reklaitis

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

04-10-24 1452ET

Copyright (c) 2024 Dow Jones & Company, Inc.