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Lattice Semiconductor Corp (NASDAQ:LSCC) $1.3 Billion Takeover Collapses

Lattice Semiconductor Corp (NASDAQ:LSCC)

Lattice Semiconductor Corp (NASDAQ:LSCC)

Lattice Semiconductor Corp (NASDAQ:LSCC) shares fell 0.70% after President Trump blocked a China-backed bid to buy the U.S. chipmaker over national security concerns.

Lattice Semiconductor Corp (NASDAQ:LSCC)
One month LSCC stock price chart

National Security Concerns

The Committee on Foreign Investment had initially recommended terminating the deal. However, the Hillsboro, Oregon-based campaign opted against terminating the deal on belief that it did not raise any national security concerns that would force the president to block it.

Lattice Semiconductor Corp (NASDAQ:LSCC) had hoped to convince the president of the benefits at stake if the deal was allowed to go through. The company had initially pledged to double its American workforce to 700 from 350.

“We will continue to focus on initiatives that will contribute to Lattice’s long term success, specifically in areas where our affordable, low power, small form factor devices create advantages,” said Lattice CEO Darin Billerbeck in a written statement.

Lattice Semiconductor Corp (NASDAQ:LSCC) manufactures a special type of chip used in certain U.S. military applications. Legislators voted against the deal on concerns the deal would result in the sale of critical intellectual property to a foreign power.

China has already objected to the deal’s termination, reiterating that countries should not use security reviews to stifle deals by Chinese companies

Ripple Effect

During the campaigns, Trump was vocal against China, consistently accusing it of stealing U.S jobs. Canyon Bridge Capital Partners takeover push is believed to have collapsed mostly because its $1.3 billion bid was backed by the Chinese government.

The Lattice Semiconductor Corp (NASDAQ:LSCC) deal is the fourth transactions to be blocked by a U.S. President. Its cancellation has already fuelled concerns about other deals backed by Chinese firms that are under regulatory scrutiny. A proposed $580 million takeover of Xcerra Corp (NASDAQ:XCRA) by China based semiconductor investment fund Unic Capital Management is one of the deals whose fate hangs in the balance

HNA Group’s $200 million proposed takeover of Sky Bridge Capital owned by former White House communications director Anthony Scaramucci is another deal that could collapse on increased regulatory scrutiny.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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