President Donald Trump on Wednesday issued an order blocking Canyon Bridge Capital Partners LLP s $1.3 billion plan to acquire Lattice Semiconductor Corp. (LSCC) .
Canyon Bridge is a private equity fund backed by China Venture Capital Fund Corp. Ltd., a Chinese corporation owned by Chinese state-owned entities that manages industrial investments and venture capital.
Trump's decision follows the recommendation of the Committee on Foreign Investment in the U.S.
Lattice said in securities filing Sept.1 that Cfius told the companies it would recommend that Trump suspend or prohibit the proposed merger. CFIUS is the Treasury Department-led interagency panel charged with reviewing foreign acquisitions of U.S. assets for national security threats.
Federal law authorizes the president to prohibit acquisitions by foreign buyers if he concludes there is credible evidence that the buyer's exercise of control might impair U.S. national security.
According to the White House, the national-security risk posed by the transaction includes "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."
Canyon Bridge officials 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."
Going forward Canyon Bridge said, "We remain focused on other investment opportunities where we can work with exceptional companies to create jobs and grow revenue."