Japanese conglomerate Softbank Group Corp plans to seek approval of its WeWork bailout package with a US government committee that reviews corporate deals for national security risks.
Softbank is to file in the coming weeks with the US Committee on Foreign Investment in the US, (CFIUS), said a person familiar with the plans, who asked not to be identified discussing private information.
The board of WeWork parent We Co on Tuesday reached an agreement with Softbank to effectively take over 80 percent of the company, in a deal that included an offer to buy US$3 billion of the existing shares.
The move was part of an effort to shore up the finances of New York-based WeWork, which was on track to run out of money as soon as next month.
Tokyo-based Softbank has run into issues with CFIUS in the past and the review could be a significant hurdle to closing the deal.
CFIUS reviews investments by foreign firms in US companies. The committee can impose conditions on a deal or recommend to the US president that a transaction be blocked.
Softbank and WeWork representatives declined to comment.
Softbank won approval from the panel to buy Sprint Corp and British chip designer ARM Holdings PLC, but the committee put conditions on its ownership of Sprint and restricted its control of alternative-asset manager Fortress Investment Group.
SoftBank was unable to fill two seats on the board of one of its portfolio companies, Uber Technologies Inc, because it did not have CFIUS approval, Bloomberg reported earlier this year.
More than a year after Softbank made a large investment in Uber, the company went public, voiding some of its prior commitments with Softbank. The company never got to fill its seats.
CFIUS became more powerful last year after the US Congress passed legislation giving it broader authority to scrutinize and potentially halt foreign deals for reasons of national security.
It has been primarily concerned about investments in US technology companies, particularly by Chinese buyers, but it also scrutinizes real-estate transactions that are close to sensitive military and government facilities.
The panel played a role in the White House’s decision last year to block the merger of San Diego-based Qualcomm Inc and Broadcom Ltd, then based in Singapore, in what would have been the largest-ever technology deal.
CFIUS also told the Chinese owner of California-based dating app Grindr that its ownership of the app was a national security concern.
The company in May said that it had reached an agreement with US officials to sell Grindr by June next year.
In a statement on Tuesday announcing the WeWork bailout deal, Softbank said that it “will not hold a majority of voting rights at any general stockholder meeting or board of directors meeting” of WeWork, and that Softbank “does not control the company.”
EXPECTATIONS: The firm, which is on track to outpace global foundry industry revenue growth, said it expects constrained advanced process capacity amid stronger AI demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday increased its projected revenue growth for this year to above 25 percent, as stronger-than-expected demand for premium smartphones and artificial intelligence (AI) devices are to drive greater utilization of cutting-edge 3-nanometer and 5-nanometer chips. In April TSMC estimated 21 to 24 percent annual growth. The firm’s revenue growth is on track to greatly outpace the global foundry industry, which is expected to rise about 10 percent this year. “Over the past three months, we have observed stronger AI and high-end smartphone demand from our customers, which is to boost the overall capacity utilization for our leading-edge
INVESTMENT: The company’s planned complex in Texas would be the first 12-inch silicon wafer fab built in the US in more than 20 years, a GlobalWafers official said GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said it secured up to US$400 million in direct funding from the US Department of Commerce under the CHIPS and Science Act for the construction of two new advanced fabs in the US. Its subsidiaries GlobalWafers America and MEMC LLC are to build a 12-inch silicon wafer fab in Sherman, Texas, and another one in Missouri to produce silicon-on-insulator (SOI) wafers used to make leading-edge chips. “With the support of the [US President Joe] Biden Administration, we are honored to be bringing to American shores the world’s most cutting-edge 12-inch semiconductor
Powerchip Semiconductor Manufacturing Co (力積電) yesterday said that net losses ballooned to NT$1.96 billion (US$60.1 million) in the second quarter, as heavy manufacturing costs from a new fab outweighed the improvement in customer demand and factory utilization. That compared with losses of NT$439 million in the first quarter. The company posted a net profit of NT$617 million a year earlier. Gross margin plummeted to 5.3 percent last quarter, from 15.4 percent in the previous quarter and 16.8 percent in the same period last year. It was the weakest since the fourth quarter of last year. The chipmaker blamed heavy depreciation and higher manufacturing
Nikon Corp is fielding strong demand for its legacy chipmaking machines in China, which is mobilizing resources to build its own semiconductor supply chain. Inquiries for the Japanese precision maker’s lithography tools have surged in China, Nikon president Muneaki Tokunari said. The company is set to revamp a lithography machine geared for decades-old manufacturing processes. Its NSR-2205iL1, launching this summer, would serve the market for mature chip technology and Nikon expects to sell more than 10 units of the machine annually, said Tokunari, who is also chief operating officer and chief financial officer. New companies are sprouting up in China to make