The plan of the global private equity fund Canyon Bridge to acquire US semiconductor companies was delayed in US government censorship. Recently, the company's US partner Ray Bingham said that the US "anti-China sentiment" policy tends to hinder the smooth progress of the acquisition.
Semiconductor companies' acquisition transactions are blocked overall
Canyon Bridge's partner said its acquisition of Lattice Semiconductor is purely for commercial purposes and has worked to eliminate CFIUS's national security concerns. However, although it has been nine months since the first contact with the committee, the $1.3 billion transaction has still not been approved, and the transaction delay is mainly due to political reasons.
Since the election, “everything about China has been scrutinized and placed in a very prominent position,†said Ray Bridge Bingham, a partner at Canyon Bridge, in an interview with The Wall Street Journal. He said that the political factor is the only reason for the transaction to face censorship. "Besides, there is nothing else."
CFIUS is a US investment review committee composed of multiple agencies responsible for reviewing whether there is a national security risk in investing in the United States. In general, companies rarely talk about CFIUS. Bingham and other partners are willing to openly talk about the issues facing their transactions in the review, which is very important.
In the fierce battle between the United States and China around semiconductors, the deal between Canyon Bridge and Lattice serves as a “lightning rod†– semiconductors are used as a chip technology for computers, mobile phones and military hardware. For sensitive areas.
CFIUS has recently increased its review of China-related transactions
Last year, Chinese companies, after many attempts to acquire US semiconductor manufacturers, caused a high degree of vigilance from the US government. Although Canyon Bridge is a US private equity firm, its original major investor was China Venture Capital (CVC). Because of its Chinese capital component, Cayon Bridge's organizational relationship has caused uneasiness among US congressmen. During the election, Donald Trump described China as a "trade predator", a statement that further exacerbated the trading environment in China. Especially in recent months, CFIUS has increased its review of transactions involving China.
The CFIUS Review Committee is led by the US Treasury, including representatives from the US Department of Defense, the State Department, the Department of Justice, and the Department of Commerce. A spokesperson for the US Treasury Department said, “Protecting national security is the primary responsibility of CFIUS. We attach great importance to this responsibility of CFIUS.†Canyon Bridge is now the third attempt to obtain CFIUS approval, and the first two applications have not been applied. Can be approved during the audit period (each audit period is approximately two and a half months).
In a separate interview, Ladis CEO Darin Billerbeck said that the two companies have promised to increase intellectual property protection to prevent intellectual property rights from being transferred to China; and in the first meeting with CFIUS, the review team "had hinted that There is "any problem. "They said, 'From the data you provided, it shouldn't be a problem.'" Billerbeck said.
"Anti-China sentiment" has caused Chinese companies' overseas acquisitions to be blocked
The United States has increased its review of China's chip acquisition transactions since last year. In December last year, after the CFIUS investigation, the then President Barack Obama prevented a Chinese investment fund from acquiring the German semiconductor equipment supplier Aixtron SE. In January of this year, the Obama administration's advisory team issued a report warning about the economic and military risks of China's 10 years of spending $150 billion to build a leading semiconductor industry. The report calls for policies to ensure the US's global leadership in the semiconductor industry.
In December last year, under the leadership of Robert Pittenger, a North Carolina Republican representative, a bipartisan panel of 22 House members of the House of Representatives sent a letter to CFIUS, drawing attention to Canyon Bridge and Ledi. The deal said that the deal could provide China with key military technology and questioned whether Canyon Bridge was associated with the Chinese government.
Canyon Bridge Managing Partner Ben Chow said that he and other partners have reported the source of funding to CFIUS without reservation from the outset. “We have never concealed anything.†In addition, Lattice sold it in 2012. Military design department. The company currently only manufactures consumer chips for consumer electronics. These chips do not have the heat shield and other features required for military use.
Lattice CEO Billerbeck is optimistic about Trump's openness to the deal, and even if CFIUS has any objections, Trump can technically approve the deal. “I know that President Trump is a very intelligent businessman,†Billerbeck said. “The focus of the Canyon Bridge private equity fund is investing and promoting innovation. If there is 10 minutes to explain the deal to him, he must Will say, very good deal."
Semiconductor companies' acquisition transactions are blocked overall
Canyon Bridge's partner said its acquisition of Lattice Semiconductor is purely for commercial purposes and has worked to eliminate CFIUS's national security concerns. However, although it has been nine months since the first contact with the committee, the $1.3 billion transaction has still not been approved, and the transaction delay is mainly due to political reasons.
Since the election, “everything about China has been scrutinized and placed in a very prominent position,†said Ray Bridge Bingham, a partner at Canyon Bridge, in an interview with The Wall Street Journal. He said that the political factor is the only reason for the transaction to face censorship. "Besides, there is nothing else."
CFIUS is a US investment review committee composed of multiple agencies responsible for reviewing whether there is a national security risk in investing in the United States. In general, companies rarely talk about CFIUS. Bingham and other partners are willing to openly talk about the issues facing their transactions in the review, which is very important.
CFIUS has recently increased its review of China-related transactions
Last year, Chinese companies, after many attempts to acquire US semiconductor manufacturers, caused a high degree of vigilance from the US government. Although Canyon Bridge is a US private equity firm, its original major investor was China Venture Capital (CVC). Because of its Chinese capital component, Cayon Bridge's organizational relationship has caused uneasiness among US congressmen. During the election, Donald Trump described China as a "trade predator", a statement that further exacerbated the trading environment in China. Especially in recent months, CFIUS has increased its review of transactions involving China.
The CFIUS Review Committee is led by the US Treasury, including representatives from the US Department of Defense, the State Department, the Department of Justice, and the Department of Commerce. A spokesperson for the US Treasury Department said, “Protecting national security is the primary responsibility of CFIUS. We attach great importance to this responsibility of CFIUS.†Canyon Bridge is now the third attempt to obtain CFIUS approval, and the first two applications have not been applied. Can be approved during the audit period (each audit period is approximately two and a half months).
In a separate interview, Ladis CEO Darin Billerbeck said that the two companies have promised to increase intellectual property protection to prevent intellectual property rights from being transferred to China; and in the first meeting with CFIUS, the review team "had hinted that There is "any problem. "They said, 'From the data you provided, it shouldn't be a problem.'" Billerbeck said.
"Anti-China sentiment" has caused Chinese companies' overseas acquisitions to be blocked
The United States has increased its review of China's chip acquisition transactions since last year. In December last year, after the CFIUS investigation, the then President Barack Obama prevented a Chinese investment fund from acquiring the German semiconductor equipment supplier Aixtron SE. In January of this year, the Obama administration's advisory team issued a report warning about the economic and military risks of China's 10 years of spending $150 billion to build a leading semiconductor industry. The report calls for policies to ensure the US's global leadership in the semiconductor industry.
In December last year, under the leadership of Robert Pittenger, a North Carolina Republican representative, a bipartisan panel of 22 House members of the House of Representatives sent a letter to CFIUS, drawing attention to Canyon Bridge and Ledi. The deal said that the deal could provide China with key military technology and questioned whether Canyon Bridge was associated with the Chinese government.
Canyon Bridge Managing Partner Ben Chow said that he and other partners have reported the source of funding to CFIUS without reservation from the outset. “We have never concealed anything.†In addition, Lattice sold it in 2012. Military design department. The company currently only manufactures consumer chips for consumer electronics. These chips do not have the heat shield and other features required for military use.
Lattice CEO Billerbeck is optimistic about Trump's openness to the deal, and even if CFIUS has any objections, Trump can technically approve the deal. “I know that President Trump is a very intelligent businessman,†Billerbeck said. “The focus of the Canyon Bridge private equity fund is investing and promoting innovation. If there is 10 minutes to explain the deal to him, he must Will say, very good deal."
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