As U.S. regulatory concerns swirl, Fairchild rejects offer from Chinese consortium
February 18, 2016
Another attempt by Chinese investors to grow their foothold in the U.S. semiconductor industry has been scuttled by the prospect of nervous regulators. The latest would-be target, industry pioneer Fairchild Semiconductor (NASDAQ: FCS), has rejected an unsolicited $2.5 billion takeover bid from China Resources Microelectronics and Hua Capital Management, opting instead for an existing $2.4 billion agreement with ON Semiconductor (NASDAQ: ON).
In a vacuum, accepting $20 per share from an American competitor rather than the $22 per share offered by the Chinese consortium may not add up. But recent history indicates that the Committee on Foreign Investment in the United States (CFIUS), the regulatory body that can block transactions for national security reasons, may have done just that if Fairchild had agreed to be acquired by investors linked to the Chinese government.
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