United States Steel Corporation Chief Executive David Burritt on Tuesday defended the company's plan to sell to Japan's Nippon Steel, saying he was confident the deal would “be completed on its merits” despite strong opposition from President Joe Biden.
“We strongly believe that this deal can be completed smoothly,” Burritt said in an interview with CNBC's “Money Movers.” “It strengthens national security, economic security and job security.”
Biden has publicly vowed that U.S. Steel will remain American-owned. two people familiar with the matter told NBC News Earlier this month, the president prepared to formally block the $14.9 billion sale. Vice President Kamala Harris and former President Donald Trump also opposed the sale.
“We have to remember that Nippon North America has been here for 50 years, and while it sounds sexy as a company that remains the same, we wouldn’t be successful without Nippon.,” Burritt said.
He said the deal would save jobs and cited Nippon's pledge to invest $2.7 billion in U.S. Steel's troubled steel mills as an example. Asked why U.S. Steel couldn't make these investments, Burritt said the company had an obligation to shareholders.
“It's about resource allocation,” Burritt said. “They are about three times the size of us. They also have the best integrated plant-related R&D and technology in the industry.”
“Our priorities will be different,” Burritt said. “Our priority is not to invest in those because we have to decide where we can get the best returns because at the end of the day, we have a fiduciary duty to our shareholders.”
The sale is currently under review by the Committee on Foreign Investment in the United States, the agency responsible for reviewing the national security implications of transactions by foreign entities. Burritt said he expected to make a decision after the U.S. presidential election in November.
CFIUS told Japan Steel the sale could “result in a reduction in domestic steel production capacity,” according to one source. Letter obtained by Reuters earlier this month. The committee said supply chains in sectors critical to national security, including transport, infrastructure, construction and agriculture, could be disrupted.
Burritt on Tuesday dismissed potential national security concerns: “By signing this agreement, they will comply with U.S. trade laws,” he said.
“It will be run by U.S. citizens and the board of directors … will be made up primarily of U.S. citizens,” Burritt said.