US President Joe Biden has blocked Nippon Steel's $14.9 billion takeover of US Steel, insisting on domestic control over a strategic industry, even though the move could damage diplomatic ties with Japan, one of America's strongest allies.
The decision ended a year-long dispute involving unions, politicians and global investors who had conflicting views.
According to Reuters, the decision was confirmed by inside sources on Friday.
Biden acted to reject various offers of benefits from Nippon Steel, including moving its US headquarters to Pittsburgh and giving the US government veto power over any reduction in production capacity.
The move has tested US-Japan diplomatic relations with Japanese Prime Minister Shigeru Ishiba, who had publicly pleaded for Biden to approve the deal to strengthen strategic cooperation between the two countries but ended in disappointment.
The impact of the decision was already felt in the market, with US Steel shares plunging 4.1% on Thursday, signaling investor concerns about the company's future.
Japanese markets remained quiet due to a public holiday, but pressure on bilateral trade relations is increasing.
