Wednesday, January 10, 2007

U.S. expands oversight of deals

A condition the U.S. government imposed on Nokia Corp.'s $20 billion joint venture with Siemens AG demonstrates that federal agencies are expanding their reach — both in terms of the types of deals that will face conditions and the requirements that will be imposed — into deals they believe carry national security risks.
Nokia and Siemens in June announced plans to combine Nokia's network infrastructure business with Siemens' communications equipment unit into a new company, Nokia Siemens Network. According to sources, the companies submitted a petition to the Committee on Foreign Investment in the United States, an interagency panel charged with examining the national security implications of cross-border deals. CFIUS has imposed a so-called mitigation agreement on the transaction, setting the terms by which foreign workers can work in the U.S.
Typically, CFIUS focuses on acquisitions of U.S.-owned companies, but Nokia and Siemens both are European based.

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