According to an insider, the Committee on Foreign Investment in the United States (CFIUS) has allowed both companies to resubmit their applications for approval of the $14.9 billion acquisition of United States Steel (X.US) by Nippon Steel, which means that the decision on the politically sensitive transaction will be postponed until after the U.S. presidential election on November 5.

This move brings a glimmer of hope for both companies. CFIUS had previously expressed on August 31 that this deal posed a threat to the steel supply chain of a critical U.S. industry and posed a national security threat. Therefore, it seemed that the merger proposal of the two companies would be rejected.

It is worth mentioning that in a 100-page letter to CFIUS, Nippon Steel stated that the company would invest billions of dollars in United States Steel, enabling it to "maintain and potentially increase steel production capacity" in the United States. Nippon Steel also reiterated that it would not transfer any production capacity or jobs of United States Steel overseas, nor interfere with any of its trade decisions, including decisions to take trade measures against unfair trade practices based on U.S. law.

Insiders said on Tuesday that CFIUS needs more time to understand the impact of this deal on national security and to engage with all parties. CFIUS has set a new 90-day deadline for both companies to resubmit their applications for review and make a decision on the proposed merger. Another insider said that the review is expected to take almost the full 90 days.

In December last year, Nippon Steel, the world's fourth-largest steel manufacturer, announced a $14.9 billion all-cash acquisition of United States Steel, with an acquisition price of $55 per share. With its strong financial resources, Nippon Steel hopes to expand its footprint in the United States through this acquisition, strengthen its position as a global giant, and use overseas expansion to respond to weak domestic demand. The acquisition is also expected to increase the company's global crude steel production capacity to 0.1 billion tons.

However, since the announcement, this acquisition plan has encountered repeated setbacks and strong backlash in the United States. Previously, this acquisition plan has been unanimously opposed by President Biden, Vice President and Democratic presidential candidate Harris, and Republican presidential candidate Trump. They generally oppose foreign ownership of United States Steel because the steel it produces is an essential commodity for building ships, trains, and infrastructure.

This transaction has become a politically sensitive issue, and both candidates are vying for the support of labor unions. Harris stated at a rally in the swing state of Pennsylvania, where United States Steel is headquartered, that she hopes United States Steel will continue to be "owned and operated by Americans," echoing Biden's view. Trump, on the other hand, promised to block the acquisition agreement if elected.

DLA Piper lawyer Nick Klein said: "Extending the timeline alleviates some pressure on both parties. Importantly, it postpones the review decision until after the November U.S. election."

Former U.S. trade official and current Eurasia Group analyst David Boling stated that delaying the review decision until after the U.S. election will reduce the political heat of this transaction and does not guarantee approval of the deal. David Boling said: "Regardless of how CFIUS decides, Nippon Steel must reach an agreement with the United States Steelworkers. Without this, the deal will be difficult to achieve."

However, the United States Steelworkers, who strongly oppose this deal, reiterated on Tuesday: "Nippon Steel's acquisition poses risks to national security and critical supply chain issues that have already been identified." The United States Steelworkers had previously stated that this nearly $15 billion acquisition was a "doomed deal" and vowed to oppose any foreign ownership of the company.