In an article published in the November 2018 issue of the ACC Docket, Bass, Berry & Sims attorney Thad McBride and co-author Elliot Burger, senior legal counsel at Linamar Corporation in Ontario, Canada discuss the expanding role of the Committee on Foreign Investment in the United States (CFIUS).  CFIUS is the U.S. government committee that reviews transactions that could result in control of a U.S. business by a foreign person in order to determine whether the transaction could harm U.S. national security.

In the article, Thad and Elliot specifically examine lessons learned from three transactions that failed due to CFIUS concerns:

  1. The September 2017 proposed acquisition of U.S.-based Lattice Semiconductor by a subsidiary of the Canyon Bridge Fund, a private equity fund backed by Chinese investors.
  2. The January 2018 proposed acquisition of U.S.-based MoneyGram International by Ant Financial, a Chinese company owned by Alibaba.
  3. The March 2018 proposed acquisition of U.S.-based Qualcomm by Broadcom, a Singapore-based rival of Qualcomm.

The article also addresses how new legislation, the Foreign Investment Risk Review Modernization Act (FIRRMA), will impact how CFIUS operates.  As noted in the article, “FIRRMA creates new obligations for transaction parties and a broader set of mandates by which CFIUS will operate. As a result, more CFIUS filings will be made, and thus more transactions will be exposed to CFIUS review.”

The full article, “Foreign Acquisition of US Assets: Aggressive Actions Likely to Continue,” was published in the November 2018 issue of ACC Docketw.