Lattice Semiconductor Corp., a US chipmaker, said Friday that it will appeal directly to President Donald Trump to approve its acquisition by Canyon Bridge Capital Partners, a China-backed buyout fund.
The move follows an official disclosure by the Portland, Oregon-based company that the Committee on Foreign Investment in the United States (CFIUS) has recommended that the White House block the proposed transaction on national security grounds. CFIUS is the government inter-agency committee that reviews foreign proposals to acquire US firms.
As Asia Times has reported, the issue of Chinese firms acquiring or investing in cutting-edge US tech firms has become increasingly sensitive in Washington — especially in areas such as artificial intelligence and driverless cars.
Reuters reported last year that Canyon Bridge is funded by cash originating from China’s central government, and also has indirect links to its space program.
Lattice Semiconductor is a maker of high-performance programmable logic devices.
Lattice said in a September 1, “8-K report of unscheduled material events or corporate events” to the US Securities and Exchange Commission:
“The Committee on Foreign Investment in the United States (“CFIUS”) has indicated that it will recommend that the President of the United States suspend or prohibit the proposed merger (the “Merger”) between Lattice and an indirect wholly-owned subsidiary of Canyon Bridge Fund I, LP (“Canyon Bridge”), a private equity fund with China-based investors.
Lattice 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. Under the Defense Production Act of 1950, as amended, if CFIUS recommends that a transaction be prohibited or suspended, the President of the United States must render his decision to suspend, prohibit or allow the proposed transaction within 15 calendar days. Lattice is hopeful that given the benefits of the proposed transaction to Lattice’s stockholders and employees in the United States, and the substantial mitigation measures proposed by the parties, if the matter is referred to the President of the United States, the President will decide to allow the proposed Merger to be consummated.
Lattice and Canyon Bridge plan to continue to engage in further discussions with CFIUS and the President to explore measures that may resolve any outstanding national security concerns and that could allow the parties to proceed with the transaction. There can be no assurances that CFIUS or the President will entertain further dialogue with the parties or that the parties will be able to identify and agree to any mitigation or to take alternative measures that will allow the parties to proceed with the transaction.”