Lattice: Chinese Buy of FPGA Maker Blocked By Trump on Security Grounds

Gladys Abbott
September 14, 2017

President Trump on Wednesday blocked the sale of a United States electronics company to a group that included Chinese investors, citing national security risks.

Shares of chip maker Lattice Semiconductor (LSCC) are down 6 cents, or 1%, at $5.65, in late trading, after Bloomberg's David McLaughlin and Jennifer Jacobsreported this afternoon that President Donald J. Trump has blocked the company's acquisition by a Chinese investment firm, Canyon Bridge Capital Partners, for $1.3 billion, announced last November, on national security grounds.

American presidents are empowered to stop the sale of domestic companies to foreign buyers if there is a potential threat to national security - either because of what the USA company does, or due to the nature of the would-be buyer.

The decision, first reported by Bloomberg, came as the Trump administration is in the process of reviewing a number of potential sales of USA firms to Chinese buyers. Other Chinese deals under review include MoneyGram International Inc.'s proposed sale to Ant Financial, the financial-services company controlled by Chinese billionaire Jack Ma. Bloomberg reported Wednesday that President Trump personally chose to block the deal on the recommendation of a panel of regulators, and the White House issued a statement confirming the decision.

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Provisions in the Defense Production Act of 1950, including the Foreign Investment and National Security Act of 2007, allows the USA president to take appropriate actions to prohibit foreign entities from acquiring U.S. businesses if such acquisitions pose potential risk to national security, the release said.

Lattice, a publicly traded company headquartered in Portland, Oregon, manufactures semiconductors for the consumer, communications, and industrial markets. Although Lattice no longer sells chips to the USA military, its biggest rivals do.

The Chinese connection has held the deal up in the federal Committee on Foreign Investment in the United States.

In this instance, Lattice and Canyon Bridge refiled three times without winning approval before making the unusual decision to appeal to Trump in hopes of winning him over with a pledge to save jobs.

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