U.S. Regulators Increasing Scrutiny for China Investments, Derailing High-Profile Takeovers
The Committee on Foreign Investment in the U.S. has ramped up scrutiny of high-profile Chinese takeover bids, restraining U.S.-China investment over national security concerns, the Wall Street Journal reported.
The CFIUS has recently drawn out reviews of several huge deal proposals, including a bid from Alibaba's (BABA) - Get Alibaba Group Holding Ltd. Report Ant Financial Services to purchase MoneyGram International (MGI) - Get MoneyGram International, Inc. Report for $1.2 billion. Regulators also denied an initial bid for recently appointed White House communications director Anthony Scaramucci to sell his controlling stake in hedge fund SkyBridge Capital to Chinese conglomerate HNA Group Co.
Alibaba's Ant refiled a bid for the deal after its initial proposal was denied by the CFIUS. At least four other Chinese bids have recently been refiled after failing to win approval during the review period. The deals could still be approved, but the postponement is often a sign of committee concerns.
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The delays come as critics suggest Chinese investment poses disproportionate risk to national security because the investment could be backed by the Chinese government. Lawmakers are also considering changes to the CFIUS review process that could further complicate Chinese investment.
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