🏗️ What's Next For The US Steel Industry?

Good morning. US stock futures were mostly flat in Thursday morning trading as investors await key labor market data.

🏗️ Biden admin set to block steel takeover

📝 Our report: US President Joe Biden is gearing up to block Nippon Steel's $14.1 billion bid for U.S. Steel, according to insiders. The proposed deal has been subject to a review by the secretive Committee on Foreign Investment in the United States (CFIUS), and Biden plans to kill it as soon as the CFIUS referral lands on his desk, said the people, who asked not to be identified because the move hasn’t yet been announced.

 🔑 Key points:

• The proposed deal has sparked an election-year firestorm in the crucial swing state of Pennsylvania, where US Steel and the United Steelworkers union that opposes the deal are both based.

• The past two weeks have brought a drumbeat of developments, including a fresh $1.3 billion commitment from Nippon Steel, a commitment to use an American-majority proxy board and a warning from US Steel that the deal’s death may spell the end of some of its plants.

• If the Nippon Steel deal is successfully blocked, the fate of US Steel remains unclear. The company warned that failing to complete the deal would imperil thousands of jobs and force the company to pivot away from some of its legacy blast furnace facilities, including those in Pennsylvania, and potentially even relocate its headquarters from Pittsburgh.

💡 So what: If the Biden administration blocks Nippon Steel's bid for U.S. Steel, the U.S. steel industry could see several impacts. First, it might preserve U.S. Steel as a domestically controlled company, which could be seen as a move to protect national security and maintain American control over a critical industry. However, this could also mean that U.S. Steel misses out on potential capital investment and technological advancements that could have been brought in by Nippon Steel. The block might also signal increased scrutiny on foreign investments in key U.S. industries, potentially leading to a more protectionist environment.

Thursday - U.S Productivity

Friday - U.S Unemployment Rate, New York Fed President Williams Speaks

📈 Venture Capitalist Fred Wilson gives his best business & investing tips!

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🛍️ Nordstrom in talks to go private

WHAT: The Nordstrom family is eyeing a $3.8 billion deal to take their iconic department store chain off the public market and back into the family fold. Erik and Peter Nordstrom, the great grandsons of founder John Nordstrom, and executives at the company, said that they formed a group with other family members and the Mexican department store chain El Puerto de Liverpool, which took a stake in the company two years ago.

WHY: US department stores have been on a downward slide for years, with some executives and investors turning to dealmaking to try to address their woes. Activist investors failed to take Macy’s Inc. private recently after the company rejected their bid.

🟩 Microsoft gets UK greenlight on acquisition

WHAT: Good news for Microsoft: The U.K.'s antitrust watchdog gave the thumbs up to its AI startup acquisition, Inflection, deciding there’s no need for a deep-dive investigation into competition concerns. The Competition and Markets Authority (CMA) said however, that the deal -- reportedly valued at around $650 million -- does fall under its regulatory purview as a "relevant merger situation," meaning similar deals in the future may still be investigated on competition grounds -- even if a full acquisition has not taken place.

WHY: The original Microsoft-Inflection probe constituted one of several similar inquiries announced by the CMA back in April. This included Microsoft’s investment in French startup Mistral AI, with the regulator swiftly concluding that the deal didn’t qualify for investigation under current merger regulations due to the size of the investment.

🖥️ X wins appeal over Cali content moderation law

WHAT: Elon Musk’s platform X won an appeal to partially block a California law that would’ve forced social media companies to spill the beans on how they tackle disinformation, hate speech, and other digital nasties. A three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco overturned a lower court judge's decision declining to pause enforcement of the new California law.

WHY: The law requires large social media companies to issue public reports describing their content moderation practices and to provide data on the number of objectionable posts and how they were addressed. Musk sued last year to stop the law from taking effect, claiming it violated speech protections under the U.S. Constitution’s First Amendment.

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