Bass, Berry & Sims attorney Thad McBride provided insight for a Bloomberg Law article on how recently enacted reforms related to the Committee on Foreign Investment in the United States (CFIUS) will spur reviews of more transactions between U.S. companies and foreign investors.
In some cases, the new law will require “mandatory declarations” by U.S. companies to notify CFIUS of transactions in which a foreign government or specific foreign individual has a “substantial interest” in the company. In addition, there are risks even when filing is voluntary. “If a filing is voluntary and you decide not to file, the main risk is that the government can come in after the fact and force you to unwind the transaction,” Thad explained. “The consequences can be very significant.”
With the new law, CFIUS has the authority to review transactions in which a foreign person, under the direction of his or her government, could gain access to critical U.S. technologies or the personal data of U.S. citizens. “The issue of personal information opens up a whole new category of transactions that CFIUS could be more interested in, especially with U.S. companies involved in the financial and healthcare sectors,” Thad said.
The full article, “Foreign Deals Reviewed by U.S. Panel to Spike With New Law,” was published by Bloomberg Law – Big Law Business on August 13, 2018, and is available online (subscription required).