China tops foreign buyers on US merger review list


Sun, Feb 21, 2016 - Page 13

It’s official: The US is reviewing more foreign acquisition proposals — and more from China — than it has in years, US Treasury Department figures released on Friday showed.

The numbers, in a report to the US Congress, provide an annual glimpse into the secretive process of vetting the national security implications of international corporate tie-ups. The report for 2014, the latest full year reviewed, shows that US officials combed through security risks of the most deals since 2008. Among them were 24 proposals for Chinese acquisitions of US assets out of a total of 147. The total for China represents a new high and marks the third year in a row that it topped other nations.

Chinese investors are on a buying spree in the US this year, setting a pace that could top last year’s record in cross-border investments. In particular, Beijing has pushed investment in US-based semiconductor businesses as a way to build its domestic chip production and lessen its dependence on foreign technology.

The Committee on Foreign Investment in the US (CFIUS) has taken a hard look recently at deals that would have put US intellectual property in Chinese hands.

While the panel can recommend that the US president block deals, few contentious reviews reach that point: Last month, Dutch company Royal Philips NV said it was canceling the sale of its lighting-components business to a Chinese-led consortium due to concerns from the panel.

The CFIUS reviews also appear to have had a chilling effect on potential deals: Fairchild Semiconductor International Inc this week rejected a takeover bid by Chinese buyers, saying there was too much risk that the CFIUS would oppose the deal.

After China, the top buyers of US assets in 2014 were from the UK, Canada and Japan, the report said.

The 147 notices filed with CFIUS rose more than 50 percent from the 97 filed in 2013.

Among the deals now under review are China National Chemical Corp’s (中國化工) takeover bid for Syngenta AG, Western Digital Corp’s proposed sale of a 15 percent stake to Tsinghua Unisplendour Corp (清華紫光) and the planned sale of the Chicago Stock Exchange to Chongqing Casin Enterprise Group (重慶財信).