In a significant development that could reshape the landscape of the steel industry, United States Steel Corp. shareholders have voted in favor of a $14.1 billion takeover offer by Nippon Steel Corp. This move leaves the fate of the iconic American steelmaker in the hands of US regulators and amidst a backdrop of political controversy.

The endorsement came as investors of US Steel overwhelmingly supported the Japanese steelmaker’s $55-a-share offer at a special shareholders’ vote held on Friday, with more than 98% approval, according to a statement released by the company. While the outcome was widely anticipated, attention has now shifted to the pending US regulatory review, as the deal finds itself embroiled in a political firestorm, particularly in the midst of a US presidential election year.

Despite the resounding approval from shareholders, shares of Pittsburgh-based US Steel experienced a decline of 2.6%, reaching $41.13 at 1:52 p.m. in New York, reflecting the uncertainty and complexities surrounding the deal.

Nippon Steel had initially announced its agreement in December to acquire US Steel at a significant premium. However, the deal encountered swift opposition from union workers, who operate the majority of US Steel’s plants, as well as influential politicians expressing concerns about foreign ownership. Notably, both President Joe Biden and presumptive Republican presidential nominee Donald Trump have voiced their opposition to the deal, as they compete for blue-collar votes in crucial swing states leading up to the November election.

Biden, in particular, has emphasized the importance of domestic ownership and voiced his support for US workers, casting doubt on whether Nippon Steel can successfully navigate the transaction. Analysts, such as Timna Tanners from Wolfe Research, suggest that despite the shareholder vote, the ultimate decision may rest with the White House, underscoring the significant political dimension of the deal.

Nippon Steel’s all-cash offer carries a substantial 142% premium to US Steel’s share price on the last day of trading before the US company announced a strategic review, highlighting the attractiveness of the deal from a financial standpoint.

However, beyond political considerations, the takeover bid must undergo a thorough review by the Committee on Foreign Investment in the United States (CFIUS). Reports indicate that the review process is unlikely to conclude until late this year, potentially extending into 2025. Such a protracted timeline, much longer than initially anticipated by the companies involved, places the takeover squarely in the midst of the US election campaign, adding further complexity and uncertainty.

In light of these challenges, both US Steel and Nippon Steel are reportedly considering whether to adjust the expected time frame for closing the deal. The outcome of this high-stakes acquisition bid remains uncertain, as it navigates through the intricate interplay of regulatory scrutiny, political dynamics, and shareholder interests, ultimately shaping the future landscape of the global steel industry.