The Committee on Foreign Investment in the U.S. recently cleared a U.S.-Singapore acquisition in the real estate industry, Squire Patton said in a Dec. 12 alert. CFIUS cleared the $14 billion acquisition of U.S.-based STORE Capital by Singapore-based GIC Private Limited and U.S.-based Blue Owl Capital. STORE Capital is an “internally managed net-lease real estate investment trust,” and GIC and Blue Owl are investors.
Mike Walsh, former chief of staff and acting general counsel at the Commerce Department, has joined Shearman & Sterling as a partner in the Washington, D.C., office's litigation wing, the firm announced. His practice will center on the national security elements of cross-border transactions, including matters involving the Committee on Foreign Investment in the U.S., export controls, Office of Foreign Assets Control sanctions and other cross-border investment proceedings. From 2018 to 2021, Walsh oversaw "legal initiatives" at Commerce, including CFIUS, export enforcement functions and appellate litigation. Most recently, Walsh was a partner at Foley & Lardner.
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The Treasury Department is seeking public comments on an information collection involving the Committee on Foreign Investment in the U.S.’s expanded jurisdiction under the Foreign Investment Risk Review Modernization Act of 2018. FIRRMA expanded CFIUS jurisdiction to allow it to review certain non-controlling foreign investments, certain real estate transactions involving foreign parties and more. Comments on the collection are due by Dec. 27.
Zendesk, a U.S.-based software-as-a-service provider, said it received U.S. approval regarding its acquisition by an investor group led by investment firms Permira in the U.K. and Hellman & Friedman, headquartered in California. The company had submitted a voluntary notice to the Committee on Foreign Investment in the U.S. and received “written notice” from CFIUS Nov. 17 that it “had concluded its review and cleared the transaction,” Zendesk said in a Nov. 17 SEC filing. The company expects the acquisition to be completed Nov. 22.
Days after President Joe Biden said the U.S. may investigate billionaire Elon Musk’s purchase of Twitter for national security reasons, Treasury Secretary Janet Yellen said she sees “no basis” for doing so, CBS reported Nov. 15. Yellen told CBS that she wasn’t “sure precisely what [the president] had in mind, but we are -- we have really no basis -- to the best of my knowledge -- to examine his finances of his company. I'm not aware of concerns that would cause us” to investigate. Yellen’s comments came less than a month after Bloomberg reported that the administration was weighing whether it should subject the deal to a review by the Committee on Foreign Investment in the U.S. (see 2210210018).
The U.S.’s best option to address potential national security risks arising from TikTok is through a foreign investment review rather than an outright ban, said James Lewis, a technology policy expert with the Center for Strategic and International Studies.
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New guidance from the Committee on Foreign Investment in the U.S. signals that the committee is preparing to increase its enforcement efforts, law firms said this week. Companies should expect more scrutiny from the committee, firms said, adding that completing and documenting due-diligence before finalizing an investment transaction is growing increasingly important.
U.S.-based TuSimple Holdings, which provides self-driving truck and autonomous freight shipping technology, is being investigated for whether it illegally transferred technology to a Chinese startup, The Wall Street Journal reported Oct. 30. The U.S. company is being probed by the FBI, the SEC and the Committee on Foreign Investment in the U.S., which are examining its “relationship” with Hydron, the report said. Hydron is an autonomous truck startup led by one of TuSimple’s co-founders. The agencies are examining whether TuSimple shared with Hydron “intellectual property developed in the U.S.” and whether that “defrauded TuSimple investors by sending valuable technology to an overseas adversary,” the report said.