U.S. blocking Chinese acquisitions of global tech firms a “red flag” – Chinese state-backed tabloid

imageStock Markets1 hour ago (Sep 02, 2021 03:10)

© Reuters. FILE PHOTO: Chinese and U.S. flags are set up for a meeting at China’s Ministry of Transport in Beijing, China April 27, 2018. REUTERS/Jason Lee

SHANGHAI (Reuters) – Chinese state-backed tabloid the Global Times called U.S. efforts to block cross-border acquisitions of tech companies a “red flag” that impedes China’s tech sector and disrupts the growth of the global tech sector.

The outlet, which is published by the People’s Daily, China’s official newspaper for the ruling Communist Party, argued a recent attempt to block a Chinese purchase of a Korean chip company “represents a dangerous precedent for the industry as a whole.”

“If the US succeeds in blocking the deal this time, it could set a very bad precedent for global high-tech mergers and acquisitions, further consolidating the industrial concentration in the US,” the op-ed read.

In March, China-based private equity group Wise Road Capital announced it would purchase Korea’s Magnachip Semiconductor Corp for $1.4 billion.

On Monday, Magnachip said in an SEC filing that the U.S. Department of Treasury, in a letter to the company’s legal counsel last Friday, said the acquisition posed “risks to the national security of the United States.”

The chip sector has become a hotbed for tensions between the U.S. and China.

Both countries are pouring billions of into their domestic industries, with the recognition that semiconductors are critical to national security and economic development.

Cross-border acquisitions, which require approval from regulatory bodies, have at times fallen apart because of government objections.

In 2018, Qualcomm (NASDAQ:QCOM) Inc’s planned $44 billion acquisition of Dutch chipmaker NXP Semiconductors NV (NASDAQ:NXPI) failed after China’s anti-monopoly regulator signaled it would not approve the deal.

That same year, Singapore’s Broadcom (NASDAQ:AVGO) Inc withdrew its $117 billion bid to acquire Qualcomm after Washington’s Committee on Foreign Investment in the United States (CFIUS) said the purchase could endanger the U.S’ national security by aiding China.

U.S. blocking Chinese acquisitions of global tech firms a “red flag” – Chinese state-backed tabloid

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Please enter your comment!
Please enter your name here