see url:
https://www.reuters.com/article/us-usa-tiktok-trump-breakingviews/breakingviews-tiktok-learns-old-lesson-about-us-art-of-deal-idUSKBN24Z05O
What was that about the USA being in favour of Free Trade? Not when it
comes to security considerations it isn't...
Quote<<<
SAN FRANCISCO (Reuters Breakingviews) - TikTok is finding out the hard
way that the Oval Office may hold the trump cards in deals that raise
national security concerns. President Donald Trump pushed for a sale of
the popular video app, then threatened to ban it, prompting a call
between him and suitor Microsoft’s Chief Executive Satya Nadella to
salvage talks. The seller, parent company Beijing-based ByteDance, and
other potential buyers have much to worry about.
Trump is playing dealmaker in what could be Microsoft’s biggest
acquisition since it bought LinkedIn in 2016 for $26 billion. After both
Reuters and the Wall Street Journal reported back-and-forth talks over
the weekend, the $1.6 trillion company said on Sunday it would continue
forging ahead after a call directly with the president.
Overseas ownership of companies or assets in the United States often
draw the attention of the Committee on Foreign Investment. That panel
made up of various government agencies has been investigating
ByteDance’s 2017 purchase of lip-syncing app Musical.ly, which merged
with TikTok. Most companies don’t bother to fight back, but in the rare
occasions they do, a U.S. president may jump in.
That happened in 2012, the only legal challenge to CFIUS since it was
established in 1975, when Chinese-based Sany Group’s affiliate Ralls
Corp. bought wind farms in Oregon. Then- President Barack Obama ordered
Ralls to not only divest the wind farms, but also forced it to remove
items added to the facilities, including concrete foundation, and barred
employee access to the premises. Sany complied.
That deal reaffirmed the commander-in-chief has carte blanche on M&A
security risks. And Trump’s administration has meddled several times
since. In March, Trump required Beijing Shiji Information Technology to
sell hotel management software firm StayNTouch. In 2018, Ant Financial
dropped its $1.2 billion purchase of MoneyGram. The Chinese owner of
dating app Grindr was ordered to sell it three years after buying it in
2016.
The tougher environment has affected other deals. A banker told
Breakingviews of two recent instances in which a Chinese firm received
higher offers from Chinese suitors but went with a lower price from a
U.S. buyer to avoid CFIUS reviews. ByteDance is the latest in a long
line of Chinese firms that have learned Uncle Sam is the ultimate poison
pill.
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