Visit our new website: worldnews.easybranches.com

Trump Blocks China-Backed Bid for Chipmaker Over Security Risk

  • Thu, 14 Sep 2017 14:52
(Bloomberg) President Donald Trump blocked a Chinese-backed investor from buying Lattice Semiconductor Corp., a personal rebuke that bodes poorly for several other Chinese buyers seeking U.S. security clearance for their acquisitions.

It was just the fourth time in a quarter century that a U.S. president has ordered a foreign takeover of an American firm stopped because of national-security risks. Trump acted on the recommendation of a multi-agency panel, the White House and the Treasury Department said Wednesday. The spurned buyer, Canyon Bridge Capital Partners LLC, is a private-equity firm backed by a Chinese state-owned asset manager.

"Consistent with the administration’s commitment to take all actions necessary to ensure the protection of U.S. national security, the president issued an order prohibiting the acquisition," Treasury Secretary Steven Mnuchin said in a statement.

The Trump administration has maintained the U.S.’s tough stance against Chinese takeovers of American businesses even as it seeks China’s help to resolve the North Korean nuclear crisis. Other Chinese deals under review include MoneyGram International Inc.’s proposed sale to Ant Financial, the financial-services company controlled by Chinese billionaire Jack Ma. The government is also examining an agreement by Chinese conglomerate HNA Group Co. to buy a stake in SkyBridge Capital LLC, the fund-management company founded by Anthony Scaramucci, who was briefly
Trump’s White House communications director.

Trump’s move builds on years of U.S. opposition to China’s efforts to bolster its chip industry by buying American technology. China, the world’s largest chip market, has been on the hunt for acquisitions in the field as it looks to build a domestic supply and rely less heavily on imports, as the $ 300 billion global semiconductor industry undergoes its biggest wave of consolidation. U.S. officials worry that China’s investment push could threaten the competitiveness of American industry and give Beijing access to cutting-edge technology with commercial and military applications.

The national-security risks posed by the deal included "the Chinese government’s role in supporting this transaction, the importance of semiconductor supply chain integrity to the United States government, and the use of Lattice products by the United States government," the White House said.

Lattice, based in Portland, Oregon, went to uncommon lengths in hopes of saving its $ 1.3 billion sale to Canyon Bridge, which was first announced in November. Acquisitions of U.S. companies like Lattice by overseas buyers are reviewed by the Committee on Foreign Investment in the U.S., a panel staffed by senior officials from the Treasury, State, Homeland Security and Defense departments.

CFIUS can bless deals or recommend changes to address security concerns. If it doesn’t like a deal, it can recommend the president block it.

But the process rarely gets that far. It’s more common for companies to walk away from a transaction once the secretive panel -- which doesn’t comment publicly on its work -- indicates it won’t approve it, rather than risk being branded a security threat. While a president in theory could overrule the panel’s recommendation, the three previous proposals kicked up to the president since 1990 have been blocked as the panel advised.

In this instance, Lattice and Canyon Bridge refiled three times without winning approval before making the unusual decision to appeal to Trump in hopes of winning him over with a pledge to save jobs.

Lattice was Canyon Bridge’s first acquisition target. The fund’s mandate is to make investments in companies in the semiconductor industry mainly in the U.S., according to regulatory filings. Canyon Bridge is investing on behalf of a Chinese venture capital fund that is sponsored by China Reform Fund Management, a state-owned asset manager.

The proposed acquisition of Lattice is at least the third Chinese deal that has collapsed this year after failing to win approval from the security panel. The others are HNA’s investment in Global Eagle Entertainment Inc., an in-flight entertainment and internet-services provider, and T.C.L. Industries Holdings’ proposed purchase of Inseego Corp.’s mobile-broadband business.

The administration has been stepping up pressure on China for months over trade and other matters as relations have soured between the two countries. Trump said in April that the Commerce Department was investigating whether steel imports from China threaten national security. Then in August, the president directed the U.S. trade representative to consider investigating China over suspected intellectual property theft.

Source: Bloomberg New By David McLaughlin and Jennifer Jacobs          China Technology News

Tags


Related Stories

SEC chair to face grilling from Senate panel over cyber breach
  • Tue, 26 Sep 2017 15:34

WASHINGTON (Reuters) - The chairman of the U.S. Securities and Exchange Commission is expected to be grilled by Congress on Tuesday over a 2016 hack o...

North Korea Says Trump Declared War on Pyongyang
  • Tue, 26 Sep 2017 14:47

Citing a Twitter post by President Trump, North Korea’s top diplomat said the U.S. had declared war on his country and that all possible responses w...

Sudanese man held over Nashville attack
  • Tue, 26 Sep 2017 14:46

Police praised the "extraordinarily brave" actions of the usher at the church near Nashville. BBC News - Africa

Thailand’s Prime Minister Prayuth Chan-ocha will meet US President Donald Trump at White House in October
  • Tue, 26 Sep 2017 14:08

US President Donald Trump will host Thai junta chief Prayuth Chan-ocha at the White House next Tuesday, in a personal coup for a Thai autocrat who was...

Uber wields new weapon in fight with London: diplomacy
  • Tue, 26 Sep 2017 13:43

Uber has followed a traditional playbook in its fight with London regulators but the company's new CEO is also trying diplomacy ABC News: Technology

Obamacare repeal on the ropes as pivotal Republican rebuffs Trump
  • Tue, 26 Sep 2017 13:32

WASHINGTON (Reuters) - U.S. Senator Susan Collins rebuffed intense lobbying from fellow Republicans and the promise of money for her state in deciding...

Package delivery startup Doorman is shutting down
  • Tue, 26 Sep 2017 12:48

 Doorman, a startup delivering packages when you schedule them will be no more after October 6th, 2017. The startup sent a letter over the weeken...

Indonesian militant jailed for life over church attack
  • Tue, 26 Sep 2017 12:41

Indonesia, which has the world's biggest Muslim population, has long struggled with Islamic militancy and has suffered a string of extremist attac...

Trump travel ban on more solid ground as top court cancels hearing
  • Tue, 26 Sep 2017 12:40

NEW YORK (Reuters) - The Supreme Court signaled on Monday it may dismiss a challenge to President Donald Trump's controversial travel ban after the Wh...

Quitting daily aspirin therapy may increase second heart attack, stroke risk
  • Tue, 26 Sep 2017 12:40

Stopping long-term, low-dose aspirin therapy may increase your risk of suffering a cardiovascular event, research indicates. Risk increases shortly af...

North Korean minister says Trump has declared 'war'
  • Tue, 26 Sep 2017 12:29

"The question of who won’t be around much longer will be answered then." ABC News: International

Trump tweets support for Strange, as Bannon makes best pitch for Moore in Alabama
  • Tue, 26 Sep 2017 12:27

President Trump late Monday tweeted once again his support for Sen. Luther Strange in the hotly contested Alabama Republican runoff for U.S. Senate, a...


News Categories