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China slows reviews of mergers involving US companies - WSJ

Published 04/04/2023, 10:59 AM
Updated 04/04/2023, 11:36 AM
© Reuters. FILE PHOTO: Flags of U.S. and China are seen in this illustration picture taken August 2, 2022. REUTERS/Florence Lo/Illustration
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(Reuters) -Chinese regulators have slowed down their merger reviews of several proposed acquisitions by U.S. companies, the Wall Street Journal reported on Tuesday, a move seen as a response to Washington's curbs on China's tech industry.

The potential slowdown includes deals such as Intel Corp (NASDAQ:INTC)'s $5.2 billion takeover of Tower Semiconductor (NASDAQ:TSEM) Ltd and chipmaker MaxLinear Inc's $3.8 billion purchase of Silicon Motion (NASDAQ:SIMO) Technology Corp.

China's State Administration for Market Regulation has asked the companies involved to make available in China products they sell in other countries in a bid to counter U.S. export controls on China, the report said, citing people close to the process.

The competition regulator, which has made this demand a precondition to approving the deals, could not be immediately reached for a comment.

As U.S.-China ties fray, merger reviews have become an additional tool for Beijing in its tit-for-tat fight with Washington over access to advanced technology.

Approval is required from Chinese authorities if companies involved in a deal have a sizable business presence in the country.

© Reuters. FILE PHOTO: Flags of U.S. and China are seen in this illustration picture taken August 2, 2022. REUTERS/Florence Lo/Illustration

If two companies in a deal have revenue of more than $117 million a year from China, the merger needs Beijing to sign off, according to the WSJ report.

Intel, Tower, MaxLinear and Silicon Motion did not immediately respond to requests for comment from Reuters.

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