Displaying items by tag: Bid

The White House has intervened in a business transaction between a Chinese-backed private equity firm and a US chipmaker. US President Donald Trump has blocked Canyon Bridge Capital Partners planned $1.3 billion acquisition of Lattice Semiconductor Corp. The decision has sent a clear message to Beijing that Washington will vehemently oppose any takeover deals that involve technologies that may have potential military applications. The bid by the Chinese-backed equity company was one of the largest ever attempted on the US microchip sector.

US regulators became more focused on the business activities Canyon Bridge were engaging in when it emerged that the firm was largely funded by capital from China’s central government and had indirect links to its space program. In addition to this, Canyon Bridge came across the radar of US defense officials when it became clear that company behind the Lattice acquisition bid was backed by the Chinese government – and this subsequently sparked severe security concerns.

Lattice Semiconductor Corp is headquartered in Oregon and makes chips known as field-programmable gate arrays, which enables companies to put their own software on silicon chips for different uses. The company publicly stated that it didn’t sell its chips to the US military anymore, unlike its two biggest competitors, Xilinx and Intel’s Altera.

It has been reported that President Trump stated in an executive order that Lattice and the Chinese-backed private equity firm shall take all steps necessary to fully and permanently abandon the proposed transaction within 30 days. Trump’s decision echoes the sentiments of the Committee on Foreign Investment in the US (CFIUS), which is a body that scrutinizes deals for potential national security threats.

US Treasury Secretary, Steven Mnuchin issued a statement confirming that both the CFIUS and the President have assessed that the transaction between the two companies pose a risk to the national security of the United States, and furthermore can’t be resolved through mitigation. The US Treasury Secretary did highlight that the risk of national security was related to the potential transfer of intellectual property and the Chinese government’s direct involvement in the deal.

However, China has expressed their disappointment and concern regarding the decision made by the US President and the US Committee on Foreign Investment. Chinese Commerce Ministry spokesman Gao Feng said he respected the US was fully in within its rights to examine the security implications surrounding potential foreign investment, but he was disappointed by how the US had conducted itself during its investigation.

He said, “We believe conducting security examinations of investments in sensitive sectors is a country’s legitimate right, but it should not become a tool for advancing protectionism and we hoped that the United States could view Chinese firms’ acquisitions objectively and provide fair treatment to what was their “normal commercial behavior”. Lattice and Canyon Bridge released a joint statement on Wednesday declaring that they had terminated the proposed deal. Lattice also said it is committed to achieving profitable growth.

Published in Government

An offer from 21st Century Fox to buy Sky TV has sparked a major political row in the UK – as Rupert Murdoch makes his bid to reassert total control in the company. The billionaire media mogul was forced to take a step back from Sky in 2010 – following the phone hacking scandal. However, Murdoch who owns 21st Century Fox has now made a fresh offer of 18.5bn for Sky TV.

The bid has seen shares in Sky TV rocket by over 30% since the announcement of the bid emerged. But news of the potential takeover has been met with anger in some quarters with former Labor leader Ed Miliband calling for Prime Minister Theresa May to move swiftly to block the takeover bid and refer it to the CMA(Competition and Markets Authority).

Miliband tweeted: “Do we want Rupert Murdoch controlling even more of the media landscape? No. Government must refer bid for Sky TV to CMA/Ofcom. He added the following in a separate tweet. “On the steps of Downing Street, Theresa May said she would stand up to the powerful. No better test than Murdoch bid for Sky. Over to you.”

The chief executive of 21st Century Fox is Mr Murdoch's son James, who is also Sky's chairman - and he was the predecessor to Sky's current chief executive Jeremy Darroch.

His son's return to the company, after he was forced to resign when the Murdoch media empire became engulfed by public outrage at reports of phone-hacking at the Murdoch-owned News of the World newspaper, led to rumours that Rupert Murdoch would make a fresh swoop for the UK-based satellite broadcaster. His empire abandoned its bid in 2011 because it was 'too difficult to progress in this climate'.

When he started the bid in 2010, his portion of Sky and his British newspapers were part of the same company, but they have since been split up. His bid vehicle owns Fox television and film studios, but not the Sun and the Times newspapers.

MP Chris Bryant waded into the row and tweeted: “It would be bad for our broadcasting ecology, for UK political life and for media plurality for Murdoch to be allowed to take back Sky.”

If the deal is confirmed, culture secretary Karen Bradley will have 10 working days to decide whether she will issue a public interest intervention notice (PIIN).That will need to detail the concerns she has with the deal - she could raise concerns about whether Rupert Murdoch is a 'fit and proper' person, or highlight issues of competition.

If she submits a PIIN, Ofcom will conduct an initial investigation within 20 days. If it has concerns, Ms Bradley will have to ask Fox to address any issues, and decide whether to accept what they suggest.

A rejected compromise would send the bid to the Competition and Markets Authority for full review, which could take up to six months. After their scrutiny, Ms Bradley will have 30 days to block, or approve the deal with conditions. Many believe Ms. Bradley will have to submit a PIIN because to do nothing could lead to accusations of bias. 

Published in Finance

A Chinese company’s attempt to purchase a German technology firm that specializes in the semiconductor industry has been blocked by the US Treasury. A review conducted by the Committee on Foreign Investment in the USA - which is chaired by out-going US President Barack Obama, found the potential takeover posed too many risks to national security.

It was able to block the purchase of German technology company Aixtron by blocking the inclusion of Aixtron’s US business in the proposed deal. In a statement issued by the US Treasury in relation to the attempted takeover, it said that the proposed purchase could place sensitive technology with potential military applications in Chinese hands.

A spokesman for the US treasury said: “CFIUS and the president assess that the transaction poses a risk to the national security of the United States that cannot be resolved through mitigation.”

It said publicly-traded Aixtron SE's expertise in technology key to making advanced compound semiconductors used for LED lighting, lasers and solar cells also has military applications.
Washington does not want to see such technology end up in the hands of the Chinese government-backed company which wants to buy Aixtron, Grand Chip Investment.

The Treasury said Aixtron's US business is an important contributor to that technology. In late October, the German government withdrew its initial approval for the 670 million euro ($714 million) takeover after Washington raised security concerns. Citing German intelligence sources, Handelsblatt daily reported that the United States had expressed fears that China could use Aixtron technology to bolster its nuclear program.

After receiving the information, the German economy ministry said on October 24 that it would reopen its review of the deal. The US Treasury said Friday that Grand Chip, a German company, expressly set up for the deal and is "ultimately owned by investors in China, including some which have Chinese government ownership."

It added that the deal would be financed by a unit of China IC Industry Investment Fund, a Chinese government-supported industrial investment fund designed to support the country's integrated circuit industry.

Published in Government