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On March 12, 2018, President Trump blocked Broadcom, a Singapore-based semiconductor manufacturer, from pursuing the purchase of U.S.-based Qualcomm, a rival chip maker.  Broadcom’s offer, reportedly for $117 billion or perhaps even more, would have been one of the largest technology deals in history.

The president’s decision followed a determination by the Committee on Foreign Investment in the United States (CFIUS) that the transaction was likely to pose unacceptable national security risks to the United States.  The president apparently made his decision shortly after Broadcom met with Pentagon officials in a final effort to salvage the deal.

Continue Reading CFIUS Continues Aggressive Intervention, Qualcomm Deal Blocked

  • MoneyGram and Ant Financial mutually terminate $1.2 billion proposed merger
  • CFIUS’s concerns focused on cyber and information security
  • Scrutiny of buyers’ information security processes is likely to increase

By Thad McBride and Todd Overman with help from law clerk Nicole Giles

On January 2, 2018, U.S.-based MoneyGram International announced that its proposed acquisition by Ant Financial, a Chinese company owned by Alibaba, was being blocked by the U.S. Committee on Foreign Investment in the United States (CFIUS).  CFIUS is the U.S. government’s inter-agency committee tasked with reviewing foreign entities’ purchases of and investments in U.S. companies when the transaction could pose a threat to U.S. national security.

Continue Reading CFIUS Continues Focus on Information Security, Blocks Chinese Acquisition of MoneyGram

Thad McBride Provides Insight to The New York Times on CFIUS Raised Scrutiny of Foreign Investments in the U.S.In a November 8 article in the New York Times, I provided insight on increased scrutiny of foreign investments in the U.S by the Committee on Foreign Investment in the United States (CFIUS). Lawmakers recently introduced legislation that would expand CFIUS authority, at least in part due to lawmakers’ concerns about continuing Chinese investment activity in the U.S. This legislation follows a rare case in September where President Trump invoked CFIUS in blocking a $1 billion acquisition of a U.S. semiconductor manufacturer by a Chinese-backed private equity fund.

As I noted in the article, CFIUS is “looking at a lot more deals than they have traditionally, and a lot more politically sensitive deals.” Under the newly proposed legislation, stricter and further reaching reviews may become the norm.

The full article, Targeting China’s Purchases, Congress Proposes Tougher Reviews of Foreign Investments, was published on November 8, 2017, and is available online.

More Acquisitions May Be Blocked in the Future

Last month, asserting national security concerns, President Trump blocked a $1.3 billion acquisition of Oregon-based Lattice Semiconductor by a subsidiary of the Canyon Bridge Fund (Canyon Bridge), a private equity fund backed by Chinese investors.  This is one of the few instances to date in which a sale to a non-U.S. buyer of a U.S. company has been blocked under rules administered by the U.S. Committee on Foreign Investment in the United States (CFIUS).  Yet the facts of this matter suggest that more potential acquisitions are likely to be blocked in the future.

Continue Reading CFIUS, POTUS Block Chinese Acquisition of U.S. Semi-conductor Maker