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Trump Blocks China-funded Acquisition Of US Firm Over Security Concerns

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President Donald Trump has blocked the proposed acquisition of a US semiconductor company by a US-based and China-funded private equity firm, citing national security concerns.

White House Press Secretary Sarah Sanders said Wednesday that the President issued an order prohibiting the acquisition of Lattice Semiconductor Corporation (Lattice) by, among others, China Venture Capital Fund Corporation Limited (CVCF).

CVCF is a Chinese corporation owned by Chinese state-owned entities that manages industrial investments and venture capital.

Canyon Bridge Capital Partners had announced in November last year the $1.3 billion acquisition plan of Lattice using the fund of CVCF. It was later agreed to by the shareholders of the Oregon-based semiconductor maker.

Canyon Bridge said in the statement announcing the acquisition that it gets its capital from limited partners in China. That includes a firm called Yitai Capital, a Hong Kong company whose parent is China Venture Capital Fund, according to the White House order.

The Purchasers and Lattice have been directed to provide a certification of termination of the proposed transaction to CFIUS.

The White House said Trump reached this decision after considering relevant factors and reviewing a recommendation from the Committee on Foreign Investment in the US.

Trump issued this order under the Defense Production Act, which authorizes the President to prohibit acquisitions of an American business by a foreign entity if there is credible evidence that it threatens the country's national security.

The national security risk posed by the transaction relates 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 US Government, and the use of Lattice products by the United States, Sanders said.

by RTT Staff Writer

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