Client Alert

Huawei CFIUS Redux: Now It Gets Interesting

March 31, 2011

Scott M. Flicker & Dana M. Parsons

Huawei Technologies Inc., the worlds second largest maker of telecom equipment and one of Chinas leading global companies, is no stranger to the scrutiny applied by the U.S. Government to foreign investments in U.S. technology companies. In 2008, Huaweis proposed investment in U.S. network security company 3Com was thwarted when objections were raised by the Committee on Foreign Investment in the United States (CFIUS), an interagency body that reviews foreign takeovers of U.S. businesses for national security reasons. In mid-2010, CFIUS scuttled another proposed investment by Huawei, this time in mobile communications companies 2Wire and Motorola. In each case, reports cited suspected ongoing ties between Huaweis founder and CEO Ren Zhengfei and Chinese military and intelligence agencies, charges that Huawei strongly denies.

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