U.S. Steel shares plunge on report White House preparing to block Nippon Steel takeover

U.S. Steel shares tumbled more than 20% on Wednesday as the White House is reportedly preparing to block the company's planned sale to Japan's Nippon Steel.

People familiar with the matter told The Washington Post that President Joe Biden was preparing to announce that he will block the $14.9 billion deal.

Vice President Kamala Harris, the Democratic presidential nominee, said U.S. Steel "should remain American-owned and American-operated" during a campaign event in Pittsburgh Monday. Former President Donald Trump, the Republican nominee, is also opposed to the deal.

U.S. Steel CEO David Burritt told The Wall Street Journal Wednesday that the company would likely be forced to close plants and move its headquarters from Pittsburgh if the deal is blocked. Burritt told the Journal that the deal is crucial to keeping U.S. Steel's older plants competitive and maintaining jobs.

"We're confident that Nippon Steel's acquisition of U. S. Steel will revitalize the American steel rust belt, benefit American workers, local communities, and national security in a way no other alternative can," a spokesperson for Nippon said in a statement.  

"Simply put, U. S. Steel and the entire American steel industry will be on much stronger footing because of Nippon Steel's investment in U. S. Steel – an investment that Nippon Steel is the only willing and able party to do so," the spokesperson said.

The deal has been under review by the Committee on Foreign Investment, a body that reviews the potential impact of foreign investment in the U.S. on national security.

The bipartisan opposition to U.S. Steel's acquisition by Nippon demonstrates a rising tide of protectionism in the U.S. even toward a company that is based in a close ally such as Japan.

U.S. Steel has 20 million metric tons of annual production capacity. Nippon, headquartered in Tokyo, is Japan's largest steelmaker. The companies combined would have up to 86 million tons of capacity.

U.S. Steel shares have fallen 41% this year.