The Chinese government is “holding back its required green light for mergers that involve American companies as a technology war with Washington intensifies,” the Wall Street Journal reports. In an effort to undermine US export restrictions, antitrust authorities are dragging their feet on approving takeovers or they demand that firms continue selling banned products in China.
Almost every multinational will require Beijing to sign off on any merger or acquisition: as little as 117 million dollars of annual revenue in China triggers the need for a review process. Deals currently awaiting approval include Intel’s takeover of Tower Semiconductor, the acquisition of VMWare by Broadcom and Max Linear’s purchase of Taiwan’s Silicon Motion Technology.
Chinese officials see merger reviews as a relatively subtle and low-cost way to pressure foreign companies and, by extension, their governments, insiders told the newspaper. “While Chinese regulators rarely reject transactions outright, they’ve resorted to delaying and withholding approvals until their demands – often focused on benefiting Chinese companies at the expense of their foreign competitors – are met.”
China has also urged the World Trade Organization to scrutinize the export restrictions. Following the example of the US, the Netherlands and Japan have recently announced curbs on semiconductor manufacturing technology, but both countries have yet to implement them.