US President Donald Trump has stopped a foreign investment into a US company. On Sept. 13, Trump blocked Canyon Bridge Capital Partners’ proposed purchase of Lattice Semiconductor Corporation for $1.3 billion, the fourth time a US president has done so. The reason? The trail of Canyon Bridge Capital Partners’ financial backing leads directly to the China Reform Fund Management Co., meaning the fund has substantial backing from the Chinese state. By blocking the purchase, Trump is making clear his opposition to Chinese state-led investment in strategic sectors.
Canyon Bridge Capital Partners’ attempted takeover faced intense scrutiny since it was announced in November 2016. The deal was filed three times with the Committee on Foreign Investment in the United States (CFIUS), the interagency committee that reviews potential purchases of US companies by overseas entities. Canyon Bridge Capital Partners made an appeal to Trump to overrule CFIUS. Although Trump’s statement explaining his decision mentioned the potential effects to the US defense supply chain, it focused on China’s attempt to acquire US technology. Lattice technology has legitimate defense applications, but the US military is not known to be one of the company’s customers. By contrast, CFIUS recommended a planned takeover of German semiconductor company Aixtron – whose products are used in certain military applications – by China’s Fujian Grand Chip Investment Fund LP be dropped, citing issues of national security.
This post was published at FinancialSense on 09/15/2017.
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