US torpedoes Chinese firm’s fibre optic deal over security concerns
30 Jun 2010
The US government has blocked a Chinese investment company's plan to buy a 60 per cent stake in a US fibre optic firm over national security concerns, a second such Chinese deal that the Obama administration has turned down in less than a year.
Albuquerque, New Mexico-based Emcore Corporation, a provider of compound semiconductor-based components for the fibre optics and solar power markets, had proposed to sell a 60 per cent stake in its fibre optics business to China's Tangshan Caofeidian Investment Corporation (TCIC) for $27.75 million in cash.
Both companies had made filed a joint filing with the US Committee on Foreign Investment (Cfius) for approving the deal.
On 24 June Emcore and TCIC withdrew their joint filing with the Cfius after the committee indicated to Emcore that it has regulatory concerns about the transaction.
Cfius, which is chaired by the secretary of the treasury, is an inter-agency committee of the US government that reviews the national security implications of foreign investments of US.
Cfius normally does not block a deal formally, but informs the American company to voluntarily drop a transaction if it finds that the deal is not in the interest of national security. However it had blocked two Chinese deals earlier.