U.S.-based Snapdragon Chemistry, a drug services company, said China-based pharmaceutical firm Asymchem won't acquire it after the companies failed to receive approval from the Committee on Foreign Investment in the U.S. The two companies, which first announced the acquisition in February, were “unable to agree to mitigation terms that would satisfy” CFIUS, Snapdragon said this month. “We are disappointed this deal was unable to be completed," Snapdragon CEO Matthew Bio said. "The goal of the deal was to expand domestic manufacturing capacity and be able to deliver a full range of drug development services to our clients.”
President Joe Biden this week signed the first executive order to give specific presidential direction to how the U.S. conducts foreign direct investment reviews, a move officials hope will sharpen the country's focus on sensitive technologies, personal data and other national security-related issues.
President Joe Biden plans to sign an executive order today to guide how the U.S. conducts national security reviews over inbound foreign direct investments. The order, which is the first to give formal presidential direction to the Committee on Foreign Investment in the U.S., will add “several national security factors” for CFIUS to consider when reviewing covered transactions and expand on the committee’s “existing statutory factors,” senior administration officials said during a Sept. 14 call with reporters. Biden will specifically direct CFIUS to consider a covered transaction's impact on critical U.S. supply chains, U.S. technological leadership (including for microelectronics and artificial intelligence), U.S. cybersecurity, personal sensitive data and more.
J. Philip Ludvigson, a former Treasury Department official, has joined King & Spalding as a partner in the Washington, D.C.-based International Trade practice, the firm announced. Serving at Treasury from 2019 to 2022, Ludvigson worked in the Office of Investment Security -- the office that chairs the Committee on Foreign Investment in the U.S. -- as the acting deputy assistant secretary and was the founding director for monitoring and enforcement. Prior to his time at Treasury, Ludvigson served as the acting director of foreign investment risk management at the Department of Homeland Security, guiding the agency's CFIUS and Team Telecom participation, the firm said. Ludvigson's practice will center on advising clients on CFIUS jurisdiction and risk-related concerns, King & Spalding said.
Only a small percentage of foreign real estate purchases are reviewed by the Committee on Foreign Investment in the United States, but that may change given an uptick in concern, lawyers at Morgan Lewis said in an Aug. 29 blog post.
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Several companies recently disclosed their filings with the Committee on Foreign Investment in the U.S. or updated the status of their ongoing CFIUS reviews.
As the Biden administration enacts legislation to bolster the green energy and semiconductor industries, the U.S. likely will see an influx of foreign investment in both sectors, which could lead to more filings with the Committee on Foreign Investment in the U.S., said Michael Considine, a Department of Energy official, speaking during a Vinson & Elkins webinar last week. He also expects some emerging clean-energy technologies to have dual-use capabilities, which also could trigger more CFIUS reviews.
A new Senate bill would add USDA to the Committee on Foreign Investment in the U.S. and broaden disclosure requirements for land purchases by foreign entities. The Security and Oversight of International Landholdings Act, set to be introduced by Sen. James Lankford, R-Okla., will “provide oversight and transparency of purchases of U.S. agricultural land that threaten national security,” the lawmaker said this month, and will require CFIUS reviews of “agriculture real estate purchases by certain foreign entities.” Other lawmakers also have proposed adding the agriculture secretary to CFIUS (see 2106010003).
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