DJ Sizing Up CFIUS Fears in Chinese Deals -- Market Talk
10:43 ET - One gauge of how scared US companies and their Chinese buyers are of national-security regulators are the breakup fees baked into their deal. The latest, the sale of Ingram Micro (IM) by China's HNA Group, includes a $400M fee for IM if the regulator, known as CFIUS, balks. That's 7% of the deal value, fairly standard when it comes to such regulatory-related termination fees. US pork producer Smithfield would have been entitled to $275M, or about 6%, had its 2013 sale to a Chinese firm been blocked. Royal Philips didn't include any break fee at all in the sale of its LED lighting unit to a Chinese consortium--a deal that CFIUS blocked last month. There's some evidence CFIUS is getting tougher: it investigated half of transactions submitted for review in 2013, the latest year for available data, versus about 37% for the previous four years.