President Donald Trump blocked Canyon Bridge Capital Partners' acquisition of Lattice Semiconductor Corp. over concerns that some of the private equity firm's Chinese investors pose a national security issue.
The president made the decision under the Defense Production Act of 1950 and later amendments, which allow the president to suspend or prohibit certain acquisitions that result in foreign control of a U. S. business "if he concludes, among other things, that there is credible evidence that the foreign interest exercising control might take action that threatens to impair the national security of the United States," a White House statement said.
On the recommendation of the Committee on Foreign Investment in the United States, the president found evidence of a national-security risk posed by the transaction relating to "the potential transfer of intellectual property to the foreign acquirer, the Chinese government's role in supporting this transaction, the importance of semiconductor supply chain integrity to the United States government, and the use of Lattice products by the United States government," the White House statement said.
Mr. Trump's executive order names Canyon Bridge Merger Sub Inc., parent companies Canyon Bridge Acquisition Co. Inc., Canyon Bridge Capital Investment Ltd., Canyon Bridge Fund I LP, CBFI's limited partner Yitai Capital Ltd., and Yitai's parent company, China Venture Capital Fund Corp. Ltd., as purchasers.
In an emailed statement Wednesday night, Canyon Bridge said: "We are obviously disappointed in today's decision by the president of the United States to forgo what we believe to be an excellent deal for Lattice's shareholders and its employees by expanding the opportunity to keep jobs in America."