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Opinion

The game of chess at the heart of China-US M&A

The only assets CFIUS will allow the Chinese to buy are the ones China doesn’t want and won’t allow. What next?

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The most important theme in global M&A has become a game of chess being played by two shadowy committees with vastly different priorities.

On one side of the board: the Committee on Foreign Investment in the United States (CFIUS). Under Trump, the attitude to Chinese ownership of US assets has become belligerent.

The rejection of the Ant Financial bid for MoneyGram is the most obvious example, but the truth is anything at all involving a remotely sensitive area – data, artificial intelligence, semiconductors, robotics – is now off the table.

If there’s an acquisition in the works, with a Chinese buyer for a company with any American assets or presence whatsoever, then the advisory job now starts, not ends, with a discussion of what CFIUS’s objections will be and what might be done in mitigation to address them.

Leading M&A lawyers in Asia now spend much of their time in Washington DC in the offices of Covington & Burling and Skadden Arps either trying to get 18-month-long regulatory impasses resolved on their deals, or working out whether it’s even bothering to attempt new ones.


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