Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Washington Blocks 3Com Takeover


Convenient Xenophobia, anyone?

Washington's inconsistency is adding to confusion over sovereign wealth funds' investments in U.S. companies.

The Committee on Foreign Investment in the U.S., or CFIUS, yesterday shot down the $2.2 billion takeover attempt of 3Com (COMS) by Bain Capital and private Chinese technology firm Huawei Technologies. At issue is a division of 3Com's business that sells security software to the U.S. government and concerns over Huawei's ties with the Chinese government.

Bain agreed to spin off the security division and Huawei offered to take a non-active management role, but the two firms could not sufficiently assuage Bush administration security concerns to complete the deal.

The credit crunch has intensified the debate over foreign investment in U.S. companies, one which thwarted the purchase of British firm P&O by Dubai Ports World in 2006. That CFIUS has given the nod to multi-billion dollar stakes in our largest financial firms like Citibank (C), Merrill Lynch (MER) and Morgan Stanley (MS) is a stark indication of who pulls the strings in Washington.

The public will likely cheer the decision, as The Wall Street Journal reports voters are increasingly wary of foreign investments in U.S. companies. Public Strategies, a political consulting firm, released a study showing voter's concern over the effects of actions of sovereign wealth funds within our borders.

As we noted the last time American protectionism made the headlines, this is a dangerous time for xenophobia.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opin= =3D =3D3D ion about the performance of securities and financial markets by = the wr=3D iter=3D3D s whose articles appear on the site. The views expresse= d by the wri=3D ters are=3D3D not necessarily the views of Minyanville Medi= a, Inc. or members=3D of its man=3D3D agement. Nothing contained on the web= site is intended to con=3D stitute a recom=3D3D mendation or advice address= ed to an individual investor =3D or category of inve=3D3D stors to purchase= , sell or hold any security, or to =3D take any action with re=3D3D spect t= o the prospective movement of the securit=3D ies markets or to solicit t=3D= 3D he purchase or sale of any security. Any inv=3D estment decisions must b= e made =3D3D by the reader either individually or in =3D consultation with = his or her invest=3D3D ment professional. Minyanville write=3D rs and staff= may trade or hold position=3D3D s in securities that are discuss=3D ed in = articles appearing on the website. Wr=3D3D iters of articles are requir=3D = ed to disclose whether they have a position in =3D3D any stock or fund disc= us=3D sed in an article, but are not permitted to disclos=3D3D e the size o= r direct=3D ion of the position. Nothing on this website is intende=3D3D d = to solicit bus=3D iness of any kind for a writer's business or fund. Mi= ny=3D3D anville mana=3D gement and staff as well as contributing writers wi= ll not respo=3D3D nd to em=3D ails or other communications requesting inves= tment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos