CFIUS Effectively Blocks German Acquisition Of U.S. Technology Company

Cree Inc. (“Cree”), the U.S.-based LED lighting and semiconductor company, announced last month that it is terminating its agreement to sell its Wolfspeed Power & RF division (“Wolfspeed”) to Infineon Technologies AG of Germany (“Infineon”) for USD $850 million. The decision to terminate the deal came shortly after Cree announced that CFIUS raised objections to the acquisition and that the parties were working within the deal structure to mitigate CFIUS’ concerns. This outcome underscores that CFIUS risk can exist in transactions involving buyers from countries that are closely allied to the United States. 

As background, CFIUS is an interagency committee with the authority to review certain foreign investments in the United States for national security considerations. Specifically, CFIUS has the authority to review “covered transactions” that could result in the transfer of control over a U.S. business to a non-U.S. person. The CFIUS review process involves a 30-day