The U.S. national security panel reviewing the deal must refer its decision on the merger to Biden by Dec. 22 or 23, Bloomberg reported. Any referral to the president suggests at least one panel member sees the deal as risky, it added.

Asked for comment on the report, the White House said on Tuesday there was no update on the deal between the two companies. The Committee on Foreign Investment in the United States panel declined to comment.

The two companies are poised to pursue litigation over the process if Biden decides to block the merger, Bloomberg reported.

Shares of U.S. Steel dropped as much as 21.8% to a two-month low of $30.55 following the Bloomberg report, and triggered multiple trading halts for share price volatility and were last down 10.4% at $34.98.

The acquisition has faced opposition within the U.S. since it was announced last year with both Biden and his incoming successor Donald Trump both publicly indicating their intention to block it.

CFIUS told the two companies in September that the deal would create national security risks because it could hurt the supply of steel needed for critical transportation, construction and agriculture projects.

Despite opposition, including from the United Steelworkers Union, Japan's Nippon has pressed on in pursuit of a deal, promising to not transfer any U.S. Steel production capacity or jobs outside the U.S. if the merger succeeds.

Nippon has also said it would not interfere in any of U.S. Steel's decisions on trade matters, including decisions to pursue trade measures under U.S. law against unfair trade practices.

In a bid to win over support from workers, Nippon Steel said on Tuesday it planned to give employees $5,000 each if the deal with U.S. Steel closed. It also pledged 3,000 euro closing bonuses to European employees in Europe, which would result in a nearly $100 million total payment to employees.