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Cross-border M&A deals frequently present unique issues and strategic closing considerations for transaction parties to navigate—including national security approvals. In a recent Delaware Chancery Court decision, these issues intersected when the court was forced to weigh national security-related approval conditions imposed by the Committee on Foreign Investment in the United States (“CFIUS”) against the buyer’s stringent contractual closing obligations.Continue Reading Closing Time: Hell, High Water, and Insights from the Delaware Chancery Court Decision in Desktop Metal v. Nano Dimension

As the FCC continues to exercise close oversight of the use of Customer Proprietary Network Information (“CPNI”), telecom stakeholders should also be sensitive to potential data security obligations under any relevant mitigation agreements with “Team Telecom,” the collection of Executive Branch agencies tasked with reviewing and resolving any national security implications related to foreign ownership of telecom providers.Continue Reading Data Security Is National Security: Inside the FCC Enforcement Bureau’s Latest Crackdown

The FCC – in the latest iteration of its expanding role as a regulator in the national security space – recently adopted a Notice of Proposed Rulemaking (“NPRM”) proposing to fortify the security of the wireless supply chain by imposing heightened requirements on the Telecommunication Certification Bodies (“TCBs”) and Measurement Facilities (“Test Labs”) that approve devices marketed and sold in the U.S.Continue Reading FCC to Strengthen Equipment Authorization Process to Protect U.S. National Security

Key Takeaways: The Treasury Department is seeking to equip CFIUS with greater enforcement and oversight authority. These new powers include the ability to request more information from transaction parties and also to assess more significant penalties—in some cases, potentially greater than the transaction value—against companies who fail to comply with mandatory filing requirements or violate mitigation agreements.Continue Reading Treasury Department Proposes to Sharpen the Teeth of CFIUS Enforcement

The Takeaway: Severe restrictions on ByteDance’s Sale of TikTok should be a warning to media and tech companies with foreign ownership, particularly Chinese investment, to know your risks and mitigate them before the government comes knocking.
Continue Reading UPDATE: National Security Meets Teenage Dance Battles: U.S. Increases Pressure on ByteDance Sale of TikTok

  • CFIUS takes an unprecedented step to fend off a potential foreign acquisition
  • The threat that China will eclipse the U.S. in telecommunications infrastructure and technology is central to U.S. national security
  • Five key takeaways from the most recent CFIUS action

Since late 2017, Singapore-based semiconductor company Broadcom has been pursuing a $117 billion hostile takeover bid for Qualcomm, its U.S.-based rival whose chips are omnipresent in U.S. telecommunications infrastructure, including consumer devices like smartphones and tablets. As part of its hostile bid, Broadcom nominated its own slate of six directors who were to be voted on at Qualcomm’s annual stockholders meeting, originally scheduled for March 6th. However, earlier this week the Committee on Foreign Investment in the United States (CFIUS) announced that it “issued an interim order to Qualcomm directing it to postpone its annual stockholders meeting and election of directors by 30 days. This measure will afford CFIUS the ability to investigate fully Broadcom’s proposed acquisition of Qualcomm.”
Continue Reading Chips on Their Shoulders: CFIUS Intervenes in Broadcom’s Hostile Takeover Bid for Qualcomm