President Joe Biden blocked the $15 billion acquisition of U.S. Steel by Japan's Nippon Steel on Friday -- something he had first vowed to do in March.
His decision comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach consensus on the possible national security risks of the deal last month.
The rise of U.S. Steel, a storied American company, runs parallel to the arrival of America on the world stage. With roots dating to the late 19th century, U.S. Steel has produced the materials used for everything from the nation's bridges and skyscrapers, to its tanks and battleships.
Following is a brief history of the company.
What eventually became the largest corporation in the world was created by J.P. Morgan and others who financed the merger of Andrew Carnegie's Carnegie Steel Co. with rival Federal Steel at the start of the 20th century. It instantly became the world's first $1 billion company. In 1907, U.S. Steel absorbed its biggest rival, drawing the ire of President Theodore Roosevelt, who said the acquisition violated the Sherman Anti-Trust Act.
The U.S. government tried to break up U.S. Steel in 1911, but failed.
U.S. Steel became a pioneer in the practice of vertical integration, a process by which a company attempts to gain control of every aspect of its business. For U.S. Steel, that meant control of coal ahd iron ore mines, coking ovens, railroads, ships and eventually, oil production.
U.S. Steel modernized operations in the 1930s and began producing more steel used for a growing middle class. Manufacturers needed steel for household appliances, automobiles and vast construction projects required millions of tons of steel.
What followed was an era of immense growth for the Pittsburgh company.
The world was at war again by midcentury and the U.S. relied on U.S. Steel to produce the basis of everything from cots to armor piercing shells and ships. The company doubled its output of raw materials, built more steel plants and by 1943, it employed a staggering 340,000 people.
By 1955, thanks in part to technical advances, the United States supplied about 40% of world demand for steel.
During the decades to come, however, steel demand began to ebb and competition grew more intense.
By the mid-1980s, the U.S. steel industry produced just about 11% of steel used globally as economic growth in developed countries slowed. By then, the United States was importing more than 25% of steel used domestically.
U.S. Steel from its earliest days under Andrew Carnegie sought control of all of its input materials to better manage costs. In addition to the steel mills that it built, the company invested in iron ore and coal mines that fueled its blast furnaces, the ships and rail lines that transported both and eventually, a major U.S. oil producer.
In the wake of the 1970s energy crisis, U.S. Steel extended its reach into the energy industry and acquired Marathon Oil Co. in 1982. It purchased Texas Oil & Gas Corp. in 1986. The company changed its name to USX Corp. that same year, an acknowledgement of a vastly restructured entity.
It didn't last.
The U.S. increased restrictions for steel imports in the 1960s and 1970s in a fight with other exporting nations, while demanding that U.S. companies modernize to reclaim a greater global market share of steel production.
The U.S. had lost much of its competitive edge by the 1970s and unit operating costs for its steel industry were about 40% higher than those of producers in Japan.
A myriad of reasons have been given for U.S. steel industry woes, included labor costs and a lack of investment by steel companies in modernizing plants.
By 2001 USX Corp. stockholders voted to adopt a reorganization plan. That included splitting the company in two, one focused on steel related businesses, again called United States Steel Corporation, and Marathon Oil Corp. The companies began operating independently in 2002.
The U.S. steel industry, as profits faded, began to consolidate as it faced a flood of cheaper imports. U.S. Steel bought the assets of the former National Steel Corp. in 2003, which added iron ore reserves and boosted its steel making capacity. The deal moved U. S. Steel from the 11th largest steel producer in the world to the fifth at that time.
U.S. Steel, however, eventually became the target of an acquisition in an industry that continued to shrink.
In 2023, rival Cleveland-Cliffs offered to buy U.S. Steel for more than $7 billion, attempting to create what would have become one of the top 10 steelmakers in the world.
Yet U.S. Steel rejected the offer and said that it was exploring a different way forward, including several unsolicited buyout bids.
By the end of 2023, it had accepted a $14.1 billion all-cash offer from Nippon Steel. That proposed deal was quashed on Friday.
"We need major U.S. companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America's national interests," Biden said in a Friday statement.
U.S. Steel, now valued at around $7 billion, is still in the process of modernizing operations. It is attempting to achieve net-zero carbon emissions by 2050 and it is developing a product called verdeX sustainable steel, which contains up to 90% recycled materials.
