A Chinese investor group has abandoned its plan for a stake into the digital card service HERE Technologies. The offer for a takeover of 10 percent ownership in the company, held by BMW, Daimler and Audi, had been withdrawn because rejection by the Committee on Foreign Investment in the United States (CFIUS) was received, the Chinese map provider NavInfo said on Tuesday. Reasons for refusal were not mentioned.
Industry experts suspect Americans’ concerns, since the US chip giant Intel is also involved in Here. US President Donald Trump has been blocking attempts by Chinese investors to acquire U.S. companies, citing national security risk. NavInfo and Here announced that they wanted to expand their cooperation in the development of digital maps for autonomous driving in China without financial involvement.
The US Foreign Investment Committee has already delayed or prohibited some American companies’ takeovers by Chinese companies. The three competing automakers Daimler, BMW and Audi had taken over the navigation maps specialist Here in 2015. The purchase from Nokia was valued at $2.8 billion euros. High-resolution digital maps are important for autonomous cars that several large manufacturers want to launch in a few years.
“The decision follows a regulatory review process during which the parties determined there was no practicable path to receiving the necessary approval for the transaction to proceed,” HERE said in a statement.
There are other Chinese transactions still pending CFIUS review. Rumors claim that Ant Financial is expected make the third attempt to win the approval from the US authorities for takeover of MoneyGram International Inc. in a deal valued at $1.2 billion. The $2.7 billion acquisition of Genworth Financial is also under review. Broadcom is also in the waiting list to proceed with its purchase of Brocade.
In 2016, Western Digital called off its plan to sell 15 percent stake to China’s Tsinghua Unisplendour after CFIUS jumped into the planned deal.
Not long ago, Trump administration denied the acquisition of Lattice Semiconductor by Canyon Bridge, a Chinese-funded company. This was their fourth try for U.S. approval. Prior to Trump, Barack Obama also prevented China’s Fujian macro fund from acquiring German semiconductor equipment supplier Aixtron’s deal because Aixtron had operations in California.