Wednesday, October 3, 2012
It is one of those things that rarely happens in an M&A deal. Late last week, President Obama issued an order prohibiting Ralls Corporation, a U.S. affiliate of the Chinese machinery manufacturer Sany Group, from acquiring four U.S. wind farm project companies. The wind farms are near restricted air space the U.S. Navy uses for flight training. President Obama’s order followed a recommendation from the Committee on Foreign Investment in the United States (CFIUS), an inter-agency group headed up by the Treasury Department that evaluates the national security risks of foreign investments in U.S. companies or operations. See here for the Treasury Department’s press release on the order. WilmerHale also has a useful short release on this rather unusual Presidential action.
Reuters reports that Ralls has sued CFIUS and the President, although the chance of a successful suit is really slim given the President’s broad authority on national security matters. It will be interesting to see whether the court will even entertain Ralls’ arguments. The case is Ralls Corp. v. Committee on Foreign Investment in the U.S., 1:12-cv-01513, U.S. District Court, District of Columbia (Washington).