CFIUS Investigating Transaction Between Swiss, California Energy Companies
The Committee on Foreign Investment in the U.S. is investigating Swiss renewable energy company Viston United Swiss' proposed acquisition of California-based Petroteq Energy, an oil production and technology company. The CFIUS investigation, disclosed by Petroteq this month, began after CFIUS completed a 45-day review period earlier this year (see 2206130025). CFIUS told Petroteq it plans to complete its investigation by Aug. 22. Viston plans to extend its offer to purchase Petroteq until after Aug. 22.
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Other companies recently disclosed information about potential future filings, including Chardan NexTech Acquisition 2, which is hoping to complete a proposed transaction with U.S.-based Dragonfly Energy. The deal may be subject to CFIUS review, Chardan said in a July SEC filing. Although Chardan believes it’s “unlikely” that CFIUS intervenes, the two parties may decide to submit a voluntary notice to the committee. The company said CFIUS may “block or delay our business combination,” which “may delay or prevent us from consummating the proposed” deal.
CleanTech Acquisition’s proposed combination with Nauticus Robotics, a U.S.-based developer of cloud-based subsea robots, software and services, could be captured by CFIUS, CleanTech said in a July SEC filing. CleanTech said “certain investors” involved in the deal are Canadian citizens, and although the company doesn’t expect to be deemed a “foreign person” under CFIUS regulations, the committee may take a different view.
With the expansion of the CFIUS scope as a result of the Foreign Investment Risk Review Modernization Act, the companies may submit a voluntary disclosure or determine that “we are required to make a mandatory filing” to CFIUS, CleanTech said. If CFIUS decides to review the purchase and blocks the deal from being completed “we may be required to liquidate,” the company said.
Benessere Capital Acquisition said its proposed deal with eCombustible Energy, a hydrogen-based fuel provider, could be scrutinized by CFIUS, it said in a July SEC filing. Benessere said U.S. people own about 89.66% of the “total allocated membership interests” of its sponsor, ARC Global Investments, but CFIUS may still consider it to be a foreign person under its regulations.
If CFIUS investigates the transaction, it could “block or delay” the business combination, impose conditions to mitigate national security concerns or “order us to divest all or a portion of a U.S. business of the combined company if we had proceeded without first obtaining CFIUS clearance,” Benessere said. CFIUS also may impose penalties if it “believes that the mandatory notification requirement applied.”
Zendesk, a U.S.-based software-as-a-service provider, plans to submit a filing to CFIUS regarding its acquisition by an investor group led by investment firms Permira and Hellman & Friedman, it said in a June SEC filing. The parties plan to submit a joint voluntary notice “as soon as practical” and plan to cooperate with any questions by the committee or a potential investigation.