US chipmaker Emcore has been forced to call off a planned sale of its fiber optics business to Chinese vendor TCIC, after regulators expressed national security concerns.
Emcore said the planned sale of a 60% stake in the business for $27.7 million (€22.6 million) has been informally blocked by the Committee on Foreign Investment (CFIUS), a US body that reviews the potential impact of transactions on national security.
The chipmaker said CFIUS had “certain regulatory concerns” over the deal, but vowed to pursue “other means of co-operation that would meet the objectives of Emcore and TCIC.”
CFIUS has only ever formally blocked one transaction, according to FT.com,but a notification that it perceives problems with a deal is usually enough to stymie it.
The decision is the latest in the latest in a line of security-related setbacks for Chinese vendors, who have been tarred by association due to international tension with the Chinese government.
India banned the procurement of all Chinese telecom gear in April, but eventually revoked the decision on the proviso that all core network equipment is security tested before being deployed.
In 2008, Huawei was prevented from buying into 3Com by the very same agency responsible for killing the Emcore-TCIC deal.