Canyon Bridge to file Lattice deal for CFIUS review for 3rd time

The deal was submitted by Canyon Bridge for review in January and again in March.

The Dollar Business Bureau

China-backed buyout fund, Canyon Bridge Capital Partners LLC , which agreed to buy American manufacturing firm Lattice Semiconductor Corp for $1.3 billion in November, will submit the pact for review with the US for the third time, reported a leading international news agency on Sunday, citing sources familiar with the matter.

The step comes as Canyon Bridge is seeking to get the approval for the deal from the Committee on Foreign Investment in the US (CFIUS), a government board that assess corporate acquisitions for possible national security risks.

The standard review by CFIUS takes around 75 days. The deal was submitted by Canyon Bridge for review in January and again in March. The refilling for CFIUS review resets the time period and gives another 75 days.

Canyon Bridge has been trying to convince the CFIUS that it will manage Lattice Semiconductor Corp without any influence from Chinese government, the sources said.

However, various American lawmakers raised concerns when last year Reuters reported that Canyon Bridge is backed by funds originating from the central government of China, and has indirect connections with its space programme.

Only a few deals in the past have filed for review three times with CFIUS. The vacancies which were left at senior positions in various US government agencies, nearly five months after Donald Trump took over as the US President, have reduced the capacity of CFIUS for reviewing cases expeditiously, the sources said.

Canyon Bridge and Lattice Semiconductor are hopeful that some major government selections in the coming few weeks will help in resolving impasse with the CFIUS, the sources added.

However, time is short to conclude the deal. The agreement between Canyon Bridge and Lattice is to close the deal before August 1, and the acquisition process cannot be completed without the clearance from CFIUS. If the review by CFIUS is not finished on time, then the two companies can ask for an extension to the deadline of the deal.

The Dollar Business Bureau - Jun 12, 2017 12:00 IST