He already brought up the idea of taking the deal to Trump after the second attempt to seek Cfius approval hit backlogs, according to the source with knowledge of the deal. I know that if you had 10 minutes to explain this deal to him, he would say it’s a good deal,” Billerbeck told the Wall Street Journal in an earlier interview. “I know that President Trump is a really intelligent businessman. There is no precedent, however, for a US president to go against the recommendation of Cfius on a proposed deal. Market observers view it as highly unlikely Trump would back the transaction given his often fiery political rhetoric on China, but Lattice said in the filing it believed “if the matter is referred to the President of the United States, the President will decide to allow the proposed Merger to be consummated”. “He is a true Trump believer…and it’s even more surprising that the board went with him,” said the source with knowledge of the deal, who asked not to be named. This is what China’s aluminium products maker Zhongwang did with its purchase of US Aleris Corporation, a deal that was poised to be China’s biggest-ever of an overseas metals processor. “Usually, if Cfius gives the ‘negative’ sign, you just withdraw the application,” said a lawyer. They say the move underpins how desperate management are to seal the deal, and that they see little to lose after the case dragged on - but big gains if Trump gives the OK. The move to go direct to Trump surprised many lawyers and dealmakers, as the reputational damage of a presidential rejection would be much bigger than falling at the Cfius hurdle. Its chief executive Darin Billerbeck was earlier spotted in Washington, DC meeting Cfius officials in a last pitch to save the sale, and has also taken the “unusual” step of taking the deal to the President in the hope of getting his back, according to reports. Lattice, however, isn’t quite giving up yet. This is due to intensified Sino-US trade disputes and the fact it is clear Cfius has become extremely “politicised” under the Trump administration, especially on deals involving semiconductors.Ĭfius also knew Canyon Bridge did not want to take the deal to Trump, according to the source, as the private equity firm had “passed a message” to the US government panel on its stance. Lattice and Canyon have three times referred the case to the Committee on Foreign Investment in the United States ( Cfius), which said the buyout potentially raised national security concerns – a claim Lattice executives fiercely reject.Ĭfius “has indicated that it will recommend that the President of the United States suspend or prohibit the proposed merger,” the chipmaker said in a filing to the US SEC on September 1, adding it “remains of the view that the proposed transaction does not raise any national security concerns that cannot be addressed by the comprehensive mitigation measures that Lattice and Canyon Bridge have proposed to implement".Īlthough the announcement said the firm would continue discussions with Cfius and Trump, a source with direct knowledge of the matter told FinanceAsia on Thursday the Chinese buyer had already “given up” hope of the transaction being approved. The process of getting regulatory approval has, however, dragged on. The deal, announced in November, had been expected to close in early 2017. Lattice Semiconductor, a chip manufacturer and Portland, Oregon’s largest tech company by market cap, wanted to sell to Beijing-backed private equity house Canyon Bridge Capital Partners for $1.3 billion. The fate of a highly-watched Chinese buyout of a US chipmaker is now in the hands of US President Donald Trump, but FinanceAsia can reveal the Chinese bidder has given up its hope of the deal possibly getting through.
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