By Bob Tita

U.S. Steel and Nippon Steel filed a pair of lawsuits Monday accusing President Biden, the president of the steelworkers union and the chief executive of a rival company of conspiring to scuttle their $14.1 billion tie-up.

Biden on Friday rejected Nippon Steel's purchase of the storied American steelmaker, citing national-security concerns.

In one lawsuit the companies asked the D.C. Circuit Court of Appeals to set aside the decision, claiming that election-year politics subverted a national-security review process. Also named in the suit was the Committee on Foreign Investment in the U.S., Treasury Secretary Janet Yellen and Attorney General Merrick Garland. Cfius is a federal interagency panel charged with probing foreign investments in U.S. companies for national-security risks.

In a separate suit filed in Pittsburgh federal court, the companies accused Cleveland-Cliffs, its CEO Lourenco Goncalves and United Steelworkers President Dave McCall of racketeering and anticompetitive activities to keep Nippon Steel from completing the sale. Cliffs attempted to acquire U.S. Steel in 2023 with the union's backing, but was outbid by Nippon Steel, which clinched a deal in December of that year.

Representatives from the White House, the United Steelworkers union and Cliffs didn't immediately respond to requests for comment.

McCall has praised Biden's decision to block the deal, saying that the review process for the deal was thorough and fair.

The lawsuits come as both companies had been ordered to terminate their deal, which would have been among the American steel industry's biggest in years. U.S. Steel has warned that it might move its Pittsburgh headquarters and close some of its older steel mills if it didn't find a buyer for the company.

Biden signaled in March that he was opposed to foreign ownership of U.S. Steel, a position that the steelworkers union had made repeatedly in letters to members and public statements.

The suit filed in D.C. appeals court accused Biden and his advisers of pledging to union leaders to block the deal, and subverting the national-security review process. The union endorsed Biden for re-election and later Vice President Kamala Harris, who also indicated she opposed the deal.

The companies in the lawsuit accused Cfius of not engaging in talks and that the security concerns presented about the transaction were "riddled with factual inaccuracies and parroted key talking points from [United Steelworkers] leadership."

The companies said that three drafts of a national-security agreement were submitted to Cfius to address concerns about the deal. Thoseincluded commitments for nearly $3 billion of investments in U.S. Steel's plants, guarantees to produce steel in the U.S. and a proposal to grant Cfius approval over independent members of a board that would oversee U.S. Steel's operation. The committee never responded to any of the proposals, according to the companies.

Biden went against his top national-security aides in deciding to block the deal. National security adviser Jake Sullivan and Secretary of State Antony Blinken were among the foreign policy-minded aides pushing for options that could keep the deal alive, not wanting to damage a crucial relationship with an East Asia ally, according to the officials.

The companies want the appeals court to order a new national-security review. At the same time they are pursuing injunctions against the union President McCall and Cliffs' Goncalves to halt what Nippon Steel and U.S. Steel described as a coordinated effort to disparage the deal and engage in anticompetitive activities to aid Cliffs' acquisition of U.S. Steel.

Write to Bob Tita at robert.tita@wsj.com

(END) Dow Jones Newswires

January 06, 2025 08:29 ET (13:29 GMT)

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