It is anticipated that those who seek acquisition deals in the U.S. and establish joint venture together with American partners will be surely confronted with more potential threats. CFIUS’ examination, just like a serpent hiding in the dark, may launch a deadly strike against you when you lack of vigilance, probably resulting in a premature end of a promising project.
In recent years, the U.S. has been increasingly sensitive to the acquisitions from Chinese investors and broken up a number of such deals. Since 2017, due to the national security reviews of the Committee on Foreign Investment in the U.S. (CFIUS), several acquisition deals initiated by Chinese investors have been aborted.
Is it the state ownership that caused the abortion of acquisition deals sought by national team?
On February 22, 2017, the deal of acquiring Xcerra, a professional semiconductor test equipment manufacturer in the U.S., by a consortium supported by the National Integrated Circuit Industry Investment Fund Co., Ltd. was halted by the Committee on Foreign Investment in the U.S. (CFIUS) for national security review. Xcerra and its potential Chinese buyer signed an agreement to terminate such acquisition. Fortunately, neither party needed to pay the other party break-up fee.
By Courtesy of PE daily