Mayer Brown’s National Security and International Trade practices have years of experience with the CFIUS process. Mergers, acquisitions and joint ventures involving a foreign party’s acquisition of all or part of a US business often are subject to review by the Committee on Foreign Investment in the United States (CFIUS). This multi-agency committee, chaired by the Department of the Treasury, was created to perform national security reviews of in-bound foreign investments and was given the authority to block foreign investments or force divestitures of foreign investments that were not cleared through a formal review process.
Lawyers in Mayer Brown’s International Trade practice have extensive experience advising investors, sellers and targets about national security restrictions that fall under the purview of CFIUS. Some members of our team participated in CFIUS reviews while serving in the US government. Our work includes the following:
- Helping to assess whether prospective transactions raise national security issues.
- Advising on how to structure transactions to mitigate national security concerns while achieving business objectives.
- Implementing all phases of regulatory clearance under the CFIUS process, including developing the basic message to be conveyed to CFIUS, preparing the notification to CFIUS, making presentations on behalf of proposed transactions and negotiating mitigation agreements to satisfy CFIUS concerns.
- Establishing compliance programs to govern classified facilities, sensitive technologies and other elements of a US business that may pose security concerns.
- Helping to anticipate and address government relations and public relations issues that may complicate the successful completion of the regulatory review process.
Over the years, we have advised on scores of transactions involving national security restrictions. Among the notable transactions on which we have provided advice are the following:
- Sinochem Group’s $1.5 billion purchase of interests in Texas’ Wolfcamp shale properties held for drilling by Pioneer Natural Resources Company.
- The acquisition of a joint venture in the seismic technology field, with majority ownership by a Chinese state-owned enterprise.
- Two separate acquisitions by a private Chinese solar company of US solar businesses.
- Deutsche Börse’s $9.5 billion acquisition of the New York Stock Exchange (subsequently blocked by EU antitrust concerns).
- The acquisition of one of the largest US steel operations, the Sparrows Point facilities in Baltimore, by the Russian firm OAO Severstal.
- A US energy distributor’s transactions with three separate foreign investors forming two REITs to develop and acquire electricity and gas transmission, storage and distribution assets.
- The acquisition of the leading oil and gas land drilling business in the United States, Grey Wolf, by the Canadian firm Precision Drilling.
- The first transaction seeking to privatize a major US airport, Chicago Midway, by a consortium of investors including Middle Eastern and Asian entities, some state-owned (did not close due to financing difficulties).
- The privatization of certain terminal operations at the Port of Portland by a Philippines-based company.
- The $450 million acquisition of a US firm focused on infectious disease diagnostics, which had classified government contracts, by a French firm.
- The acquisition by a Chinese consortium, including government instrumentalities, of a US Internet services company.
- The $2.6 billion privatization of the Caribbean’s busiest airport, Luis Muñoz Marin International Airport in San Juan, Puerto Rico, by a Mexican-led consortium.
- The acquisition by French private equity investors of a US firm specializing in airport ground support equipment and services.