Tech Companies Disclose CFIUS Reviews
Several companies recently disclosed their filings with the Committee on Foreign Investment in the U.S. or updated the status of their ongoing CFIUS reviews. Transactions involve Chinese technology companies, an agricultural technology business and a workplace learning technology provider.
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CFIUS is looking into a 4-year-old transaction involving a U.S.-based autonomous freight shipping company, the company said this month. CFIUS asked TuSimple Holdings, which provides self-driving truck technology, to submit a written notice disclosing the 2017 purchase of its “redeemable convertible preferred shares” by Sun Dream, an affiliate of Chinese technology company Sina. CFIUS is also examining the acquisition of TuSimple LLC by Tusimple (Cayman), which was the company’s previous name, an Aug. 5 Securities and Exchange Commission filing said. The review continues a CFIUS trend of scrutinizing years-old investment transactions involving China (see 2101290021, 2005290027 and 2010270050).
TuSimple said CFIUS began a 45-day investigation of the 2017 purchase, according to an Aug. 16 SEC filing. “It is not uncommon for CFIUS to initiate the 45-day investigation period,” the company said, “and it does not indicate one way or the other whether CFIUS will eventually identify a national security concern with the 2017 Transaction.” The company said CFIUS may require it to enter into a mitigation agreement to address “any unresolved national security concerns as a condition to clearance.” TuSimple said it “continues to cooperate fully” with CFIUS and added that all current company board members, including co-founder Xiaodi Hou and shareholder Mo Chen, as well as its “entire” senior management team, are “solely citizens” of the U.S. or Canada.
CFIUS will also officially investigate the proposed deal between Beijing-based Wise Road Capital and South Korea-based Magnachip Semiconductor, Magnachip said in a July 29 SEC filing. The company said the acting CFIUS chairperson told both companies July 26 that the committee expects to complete the investigation by Sept. 13. The two companies, which are expected to face intense scrutiny by CFIUS, said the transaction likely would be delayed and said it would go forward only without the imposition of “burdensome” mitigation conditions by CFIUS (see 2107060028).
CNH Industrial, a global capital goods provider, and Raven Industries, a U.S. manufacturer of precision agricultural technology products, recently submitted a joint voluntary notice to CFIUS regarding their proposed combination, Raven Industries said Aug. 6. The companies also submitted a 60-day prenotification to the State Department’s Directorate of Defense Trade Controls. While they “expect” to complete the deal in the fourth quarter of this year, “it is possible that factors outside the control of Raven or CNH Industrial could result in the Merger being completed at a later time, or not at all.”
GP Strategies, a workforce solutions provider, and Learning Technologies Group, a provider of digital workplace learning technologies, submitted a July 26 voluntary joint notice to CFIUS regarding LGT's proposed purchase of GP Strategies, they said Aug. 11. Under their agreement, the two companies agreed to comply with a potential CFIUS investigation, “permit each other to review any communication” with CFIUS and use “reasonable best efforts” to obtain CFIUS clearance.