Morrison & Foerster partner Chuan Sun was quoted in the article “CFIUS’ attitude toward Chinese bidders may not become clear for months, say lawyers”, originally published by Dealreporter on October 4, 2017.
In the article, Mr. Sun, a Hong Kong-based partner who focuses on China outbound and technology transactions, is less optimistic about increased transparency around CFIUS reviews this year.
“I doubt if there would be sufficient data points to draw any conclusion as to the current nature of the CFIUS regime by the end of 2017,” Sun said, adding that Trump’s visit to China is certainly relevant, but there are too many uncertainties overall.
“The key factor will be whether any of the legislation pending in Congress regarding CFIUS is enacted into law,” said Sun. Measures being considered include potentially introducing harsh treatment of state-owned enterprises (SOEs) and reciprocal treatment of foreign investment into the equivalent sector in the acquiring company’s home country.
“But with the collapse of Trump’s second healthcare bill, tax reform seems to be on the Trump administration’s top legislative agenda at the moment. I doubt the administration would be able to focus on CFIUS-related legislation proposals and push such proposals through,” Sun said.
As Sun explained, deals can fail at CFIUS for a number of reasons and it’s hard for people on the outside to get reliable visibility on what happened because CFIUS files are kept confidential.
Sun added that CFIUS’ suggested remedial measures may “vary depending on the dynamics of the negotiation process and the nature of the transaction”.