Ant Financial Services Group (螞蟻金服) is expected to make a third try for US approval of its takeover of MoneyGram International Inc, as a secretive national security panel throws up hurdles for Chinese investors seeking to buy US companies.
The former affiliate of Jack Ma’s (馬雲) Alibaba Group Holding Ltd (阿里巴巴) is preparing to resubmit the US$1.2 billion deal for review before the US Committee on Foreign Investment (CFIUS), said people familiar with the matter, who asked not to be identified because the process is not public.
The preparations underscore the trouble Chinese buyers face in persuading the panel that investigates foreign acquisitions to greenlight takeovers.
US President Donald Trump this week killed a Chinese investment fund’s purchase of Lattice Semiconductor Corp, which went before the panel three times without winning approval. The panel is now considering at least two other major deals involving Chinese acquirers.
Ant failed to win security clearance from CFIUS for its MoneyGram deal announced in January after an initial 75-day review period. It resubmitted its request and now faces the expiration of a second 75-day period for consideration.
“We are not commenting on the CFIUS process, but we are continuing to work with the various regulatory agencies and remain focused on closing the transaction by the end of the year,” Ant said in an e-mailed statement.
The company’s shares fell 1.2 percent to US$15.92 in New York trading.
It is rare for CFIUS recommendations to halt a deal to make it to the president, because companies typically walk away from a transaction to avoid being branded a national security threat.
Before Trump, presidents had blocked only three deals because of national security concerns.
Former US president George H.W. Bush stopped a Chinese acquisition of MAMCO Manufacturing Inc, an aircraft-parts maker. Then-US president Barack Obama in 2012 blocked Chinese-owned Ralls Corp from developing a wind farm near a navy base in Oregon and last year upheld a CFIUS recommendation to bar a Chinese company from buying semiconductor equipment supplier Aixtron SE.
Trump’s decision to stop Canyon Bridge Capital Partners LLC, a private equity firm backed by a Chinese state-owned asset manager, from buying Lattice was based on a CFIUS recommendation.
There are at least three other deals under CFIUS review that could wind up on the president’s desk. They include an agreement by Chinese conglomerate HNA Group Co (海航集團) to buy a stake in SkyBridge Capital LLC, the fund-management firm founded by Anthony Scaramucci, who was briefly Trump’s White House communications director.
Genworth Financial Inc’s US$2.7 billion sale to China Oceanwide Holdings Group Co (中泛控股集團) is under review by CFIUS.
Chipmaker Broadcom Ltd, which has headquarters in Singapore as well as in San Jose, California, is also seeking approval to buy Brocade Communications Systems Inc, a supplier of semiconductors that connect phones and tablets to Wi-Fi networks.
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