The decision prohibited Canyon Bridge, its partner Yitai Capital and Yitai's parent, the China Venture Capital Fund Corp (CVCF), from purchasing the U.S. firm, which serves the consumer, communications and industrial markets.
President Donald Trump on Wednesday blocked attempts by a Chinese state-owned firm to acquire an American semiconductor manufacturer, saying this posed a threat to U.S. national security.
American presidents are empowered to stop the sale of domestic companies to foreign buyers if there is a potential threat to national security - either because of what the US company does, or due to the nature of the would-be buyer.
The blocking of the deal could foretell trouble for other deals under review, including the proposed purchase of MoneyGram International by a Chinese financial services company. The government is also examining an agreement by Chinese conglomerate HNA Group Co.to buy a stake in SkyBridge Capital LLC, the fund-management company founded by Anthony Scaramucci, who was briefly Trump's White House communications director.
It was the latest in a series of get-tough trade move by Mr. Trump against China.
The national security risk included "the potential transfer of intellectual property" to the Chinese-backed company and the "Chinese government's role in supporting this transaction", according to Mnuchin's statement.
Mnuchin added that the national security risk was related to the transfer of intellectual property, the Chinese government's role in supporting the deal, the importance of semiconductor supply chain integrity to the US government and the USA government's use of Lattice products. USA officials worry that China's investment push could threaten the competitiveness of American industry and give Beijing access to cutting-edge technology with commercial and military applications.
We are obviously disappointed in today's decision by the President of the United States to forgo what we believe to be an excellent deal for Lattice's shareholders and its employees by expanding the opportunity to keep jobs in America. If it doesn't like a deal, it can recommend the president block it. Lattice stock fell almost 2% in after hours trading following the news.