One week after a Chinese company announced its desire to buy Micron Technology for $23 billion, inside sources are telling Reuters that the deal is "not realistic because U.S. authorities would block the deal due to national security concerns."
The Chinese government-backed Tsinghua Unigroup announced July 13 that it was submitting an offer to buy Micron for nearly $21 per share, which, if successful, would result in the largest Chinese acquisition of an American company. As soon as the announcement was made public, Micron stock began to soar on the NASDAQ exchange to nearly $20 a share (Micron was trading closer to $19 per share at the start of trading on July 21).
In this morning's exclusive report from Reuters, sources that asked not be identified because the deliberations are confidential, said that Micron had not even officially hired an investment bank to broker the deal since "it is not seriously considering the offer." In particular, they pointed to a U.S. interagency task force, dubbed the Committee on Foreign Investment in the U.S. (a division of the U.S. Department of the Treasury), as not being supportive of any possible Chinese takeover of Micron.
Meanwhile, Stewart Baker, a CFIUS expert with the Washington, D.C.-based Steptoe & Johnson LLP, told Reuters that he didn't think the deal was impossible, but it would come under fierce regulatory scrutiny.