Last week's report that Tsinghua Unigroup would bid $23 billion to buy out memory maker Micron Technologies may have been premature. Reuters reports that according to its sources, Micron has told Tsinghua that the deal would likely be blocked. These same sources also indicated that Tsinghua had expressed interest in Micron, but had not made a formal proposal.
Micron believes that the acquisition will ultimately be blocked by the Committee on Foreign Investment in the United States (CFIUS), citing national security concerns. Reuters says CFIUS has three options to choose from: block the acquisition entirely, approve the acquisition, or give approval on the condition that the companies have to sell off certain divisions or take other steps that would offset any national security concerns.
Speaking to Reuters, Stewart Baker, a CFIUS expert with Steptoe & Johnson LLP said the deal would draw heavy scrutiny. "It would be very challenging," Baker said. "I won’t say it's impossible." Both Micron and Tsinghua declined to comment on the report.