CFIUS checks Chinese investment in US technology manufacturers
Near-land investment, acquisition of US companies Lumileds, Witten (Western Digital)
Repeatedly frustrated, mainly defeated by the outsiders Investment Committee (CFIUS)And the outsider Investment and National Security Act (FINSA).
The bill was formally signed by US President Bush in 2007. It is actually aimed at Exon-in 1988-
The Floria amendment is revised to further strengthen restrictions and reviews on foreign companies' investment in the United States.
Unisplendour and Western Digital, the hard drive leader, reached an investment agreement of in October 2015 because CFIUS in the United States was in the first instance (review)After the decision is still required to enter the investigation (investigation)
At the stage, it shows that CFIUS has a demand for further review of the case. The land side considers the difficulty of subsequent development and terminates the transaction according to the original contract. Review Exon-
The reason why the Floria amendment was legislated by Congress was caused by the rebound caused by Fujitsu's plan to purchase 80 shares of Fairchild Semiconductor Company in 1986, at that time, Fairchild Semiconductor was an important chip supplier for many military products in the United States.
CFIUS is affiliated to the US Treasury Department, but in fact it operates as a committee. Its members have expanded in response to the development of the world situation, on the whole, it includes the Secretary of Finance, the secretary of state, the Secretary of Commerce, the US trade representative, the director of the National Science and Technology Policy Office, the secretary of defense, the secretary of homeland security, etc, its decisions and procedures are not subject to judicial review. Although the final veto of the investment case is the power of the US president, in most cases, the investment parties retreat in the process of consultation with CFIUS and withdraw (withdrawal).
Although the investors and the investee's declaration and notification of CFIUS are voluntary, because the US president and many members of CFIUS can propose to investigate the investment cases involving national security, and CFIUS has added special security arrangements to the case since Alcatel acquired Lucent in 2006 (
special security arrangement)
That is, CFIUS can restart the review of foreign investment cases at any time. If it does not act in accordance with the provisions of special security arrangements, it can even reverse the case, indicating that the power of this bill has gradually expanded. Exon-
The Floria amendment has already had 12 recommended standards for the assessment of national security. After 911 and other events, after the FINSA act was completed in 2007, the review and restrictions were strengthened, however, the opacity and political considerations of the unit after the expansion of power have also caused opposition from US and overseas business groups.
For example, the plan of land acquisition of Philips's stake in Lumileds, a US subsidiary, is to withdraw from CFIUS.
Although LED is not a cutting-edge technology, while the US government is vigorously promoting new energy programs and popularizing LED lighting, it has a different meaning to restrict its LED investment.
According to CFIUS's public version of the annual report to the US Congress (There is also a detailed non-public version of Congress)
2012 ~ On 2014, I submitted a notice to CFIUS (notice)
There are many manufacturers from the mainland, with a total of 68 cases. After 2015, land-based overseas mergers and acquisitions have increased significantly, which has caused many US governments and the private sector to rebound.
In addition, a total of 2012 ~ Of the 358 cases submitted to CFIUS in 2014, 42 cases were withdrawn by themselves and 1 case was ruled by the US president. According to CFIUS statistics, as many as 88 investment cases can pass smoothly. Therefore, the recent two consecutive investment notifications of land Capital have resulted in their own cancellation, highlighting the attempt of land capital to expand its influence in the technology industry through financial resources, it was given a cold nail by the US official.
In fact, when Huawei wanted to invest in 3Com and other US companies, it revoked the acquisition application after consulting CFIUS, and even later acquired some assets of a bankrupt server technology company 3 Leaf, at the request of CFIUS, the completed transaction was canceled, which shows the influence of CFIUS.
In addition, the mainland Sany Group's relationship enterprises in the United States, under the unknown CFIUS acquisition of US wind power enterprises, although completed the EIA review, the US aviation administration and other units of the procedures, later, he was still ordered by the President of the United States to stop the transaction and stop the factory. Since the president of the United States and CFIUS members can propose to start the review of foreign investment cases, therefore, the vast majority of foreign investment cases with more than 10 holdings will be declared.
In general, the bills involving foreign investment, especially FINSA, give CFIUS ambiguity and space to explain national security. Its processing procedures are basically not subject to judicial supervision, and the results of the review are difficult to reverse, in addition, CFIUS members come from heads of various departments of the US government and have great political characteristics. Every 2016 US election year, it will be even more difficult for land companies to successfully invest in the US technology companies they want.