United States Steel Corp. (NYSE:X) shares plunged Tuesday following a report that President Joe Biden will block the company's proposed deal with Nippon Steel. 

The Details: People familiar with the matter told Bloomberg that Biden views the sale as a national security risk.

The Committee on Foreign Investment in the United States (CFIUS) is expected to send the case back to Biden later this month. 

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The CFIUS panel has been reviewing the proposed sale of US Steel for much of 2024. It must refer its decision to Biden by Dec. 22 or 23. US Steel and Nippon Steel are preparing to pursue litigation if Biden does block the merger, the sources say.

"This transaction should be approved on its merits," US Steel spokeswoman Amanda Malkowski told Bloomberg. 

"It is inappropriate that politics continue to outweigh true national security interests — especially with the indispensable alliance between the U.S. and Japan as the important foundation," Nippon Steel said in a statement.

"Nippon Steel still has confidence in the justice and fairness of America and its legal system, and — if necessary — will work with U.S. Steel to consider and take all available measures to reach a fair conclusion," the company added. 

The CFIUS, which extended the process in September, moved the deadline for referral to December. The sources told Bloomberg that another extension is unlikely, though that would push the decision to President-elect Donald Trump. 

Both Biden and Trump, along with the United Steelworkers union, have expressed opposition to the merger. 

The timing of an official announcement from Biden remains unclear. He will have 15 days from the date of the referral to announce a decision. 

X Price Action: According to data from Benzinga Pro, United States Steel shares ended Tuesday’s session down 9.68% at $35.26.

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