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Intersil Gives U.S. a China Headache

Lawyers for Japanese chipmaker Renesas may need to get a little creative if they're to pull off a reported acquisition of U.S. chip designer Intersil. Regulators in Washington D.C. face a bigger headache.

Renesas is in talks to buy Intersil for about $3 billion, a person with knowledge of the matter told Bloomberg News. The negotiations were reported earlier by the Nikkei Asian Review. The Japanese company said in a statement that Intersil is one of several options it's looking at for expansion.

Neither price nor funding should be the stumbling block for this deal to go through. Renesas has $3.9 billion in cash and while a premium of up to 42 percent over Intersil's current $2.1 billion valuation is high, it's not off the charts.

What may trip up the acquisition is U.S. regulators. Specifically, the Committee on Foreign Investment in the U.S., aka CFIUS. According to the U.S. Treasury, which chairs the committee:

CFIUS is an inter-agency committee authorized to review transactions that could result in control of a U.S. business by a foreign person, in order to determine the effect of such transactions on the national security of the United States.

We've seen this group pop up before to nix acquisitions...


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