China Tops CFIUS Filings in 2014, Raising U.S. Security Concerns
In 2014, China topped the list of foreign countries filing the most notices with the Committee on Foreign Investment in the United States (CFIUS), with a total of 24. Meanwhile, no M&A transactions from investors in Cuba, Iran, Syria, or Venezuela were found that year.
The U.S. Intelligence Community has raised concerns about a coordinated strategy by foreign governments or companies to acquire U.S. firms involved in critical technologies. Prime targets include information technology, electronics, materials, and semiconductor companies.
In 2014, the finance, information, and services sector accounted for 26% of covered transactions reviewed by CFIUS. Manufacturing transactions made up 47% of the total. The United Kingdom ranked second with 21 notices, and Canada followed with 15.
Historically, U.S. investors dominated CFIUS filings. However, in 2014, investors from 24 countries, primarily the United States, were replaced by China as the most active source of investments scrutinized by CFIUS.
The increase in CFIUS filings from China and the suspected coordinated strategy by foreign entities highlight the growing scrutiny of foreign investments in the U.S. These trends suggest a heightened focus on protecting U.S. critical technologies and national security.
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