PITTSBURGH, Sept 05 (AFP) : United States Steel warned Wednesday it could shut its headquarters and factories in Pennsylvania, a key swing state in November's election, if a takeover by Japan's Nippon Steel is blocked.
At a rally in downtown Pittsburgh, backers of the deal touted the transaction as a lifeline to one of western Pennsylvania's defining industries.
But shares of US Steel sank almost 17.5 percent following a Washington Post report that President Joe Biden plans to block the deal. Bloomberg News quoted unnamed sources with the same information.
In December, US Steel sealed a $14.9 billion agreement to sell itself to Nippon, which has promised investments to keep Pennsylvania factories competitive and newer "mini mills" in the American South.
But the transaction has faced an avalanche of political opposition following its condemnation by the United Steelworkers (USW) union, which on Wednesday dismissed the Pittsburgh rally as an "increasingly desperate" gambit.
The company laid out what Chief Executive David Burritt described as "unavoidable" negative consequences for the Pittsburgh region if the deal is killed.
"Without the Nippon Steel transaction, US Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk," the company said in a statement.
"The lack of a deal with Nippon Steel raises serious questions about US Steel remaining headquartered in Pittsburgh," it added.
On Monday, at a Labor Day election campaign event in Pittsburgh, Vice President Kamala Harris mirrored Biden's stance, declaring that US Steel "should remain American-owned and American-operated."
Former president Donald Trump has also vowed to block the deal, while his running mate J.D. Vance has led congressional opposition to the takeover, describing domestic steel production as a national security priority.
Pennsylvania is one of a handful of states that will decide the election on November 5, and is possibly the one on which the whole result will hinge.
The deal faces a review by the Committee on Foreign Investment in the United States, an interagency body established to review foreign takeovers of US firms.
CFIUS "hasn't transmitted a recommendation to the President, and that's the next step in this process," a White House official said.
- 'Future generations' -
US Steel has argued that the Nippon deal is needed to ensure sufficient investment in its Mon Valley plants in Pennsylvania, the earliest of which dates to 1875.
Nippon has promised to upgrade the plants, while also keeping US Steel's 1,000-worker office in downtown Pittsburgh.
To make its case, Nippon has sent executives to Pittsburgh to meet officials and workers, while engaging with Washington powerbrokers by hiring Trump's former secretary of state, Mike Pompeo, to lobby its case.
