Arent Fox Partner Craig King Interviewed on Proposed Sale of 3Com
On October 9, Arent Fox partner Craig King appeared on the Bloomberg Television program Money & Politics to offer his analysis of the proposed $2.2 billion buyout of network equipment maker 3Com Corp. by Bain Capital Partners and the national security implications of the deal.
The proposed buyout has stirred some controversy on Capitol Hill because a Chinese telecommunications company owns a minority stake in Bain Capital. 3Com does a significant amount of work for the Pentagon and some lawmakers are concerned that the Chinese government could gain access to sensitive U.S. defense information should the deal go through.
Accordingly, the deal will be reviewed by the Committee on Foreign Investment in the United States (CFIUS). CFIUS is a 12-member group of key economic officials at the White House and several Cabinet-level officials created in 1988. Since the September 11 terrorist attacks six years ago, the committee has become much more active in investigating potential national security issues surrounding proposed deals involving foreign buyers.
Craig said that while the CFIUS review is “fairly standard” in this type of situation, the deal “raises questions that need to be looked at.”
“When you look at CFIUS review, you really have two government policies that have some tension,” Craig told the host of Money & Politics. “We certainly don’t want foreign investment where foreign entities control parts of the industry that are really essential to national security.”
But, at the same time, Craig continued, “we have always had a policy of open investment. We encourage foreign investment where it does not raise national security concerns.”
To watch a video of the complete interview, please click here.