By Mike Scarcella

Feb 6 (Reuters) - A group of U.S. consumers have sued Nippon Steel 5401.T to block its proposed $14.9 billion purchase of U.S. Steel X.N, saying the deal threatens to reduce competition and drive up prices for many products.

The lawsuit, filed on Wednesday in the federal court in San Francisco, California, alleged the transaction violated U.S. antitrust law because it would further consolidate the steel manufacturing market.

Former Democratic President Joe Biden's administration last month halted the planned acquisition on national security grounds. The companies have asked a U.S. court in Washington, D.C. to overturn the decision, which they called “blatantly unconstitutional” in a filing this week.

Nippon Steel did not immediately respond to a request for comment about the consumer lawsuit. U.S. Steel, which is not a defendant, had no immediate comment.

An attorney for the plaintiffs did not immediately respond to a request for comment.

The Biden White House delayed until June an order for Nippon Steel to abandon the deal, giving the courts more time to weigh the pending legal challenge.

Republican President Donald Trump has expressed opposition to the merger.

Nippon is the world's fourth-largest steelmaker, and U.S. Steel is the third-largest in the United States and 24th biggest worldwide.

U.S. antitrust law allows private plaintiffs to challenge mergers separately from the government.

The 16 consumers in California, Florida, Ohio, Texas and other states who sued Nippon Steel said in their lawsuit that they are direct and indirect purchasers of steel-related products, including automotive, appliances, tools and other goods.

They alleged that Nippon’s acquisition would “force further consolidation among less than a handful of steel producers in the United States and substantially threatens price-fixing and price stabilization among the remaining manufacturers.”

The companies have defended the deal, saying it would help U.S. manufacturing compete with China and provide greater job security for American steelworkers.

The case is Donald Freeland et al v. Nippon Steel, U.S. District Court, Northern District of California, No. 3:25-cv-01240.

For plaintiffs: Joseph Alioto of Alioto Law Firm, and Terence O’Toole of Starn O’Toole Marcus & Fisher

For defendant: No appearance yet

Read more:

Biden admin delays enforcement of order blocking Nippon Steel, US Steel deal, companies say

Cleveland-Cliffs eyeing all-cash bid for U.S. Steel, source says

U.S. Steel's thwarted merger, and a novel bid for recompense

(Reporting by Mike Scarcella)

((Mike.Scarcella@thomsonreuters.com;))