Zoomlion Bid for Terex Stokes National Security Fears

February 22, 2016

Reuters reports that at least one U.S. congressman has voiced concern over a possible Terex-Zoomlion deal, citing national security questions.

U.S. member of Congress Duncan Hunter (R-San Diego, CA) raised concerns about a possible Zoomlion-Terex deal in a letter to U.S. Treasury Secretary Jacob Lew, citing the Chinese company's longtime association with China People's Liberation Army.

"The fact that a leading PLA supplier is seeking to purchase an American company that provides critical infrastructure equipment to a number of government agencies including the Department of Defense and the Department of Homeland Security, demands that the agreement undergo through scrutiny if it does materialize," Hunter said. “I have great deal of concern about the implications this possible takeover could have on our national security.”

Terex has 97 so-called priority-rated contracts with the U.S. government that could attract CFIUS scrutiny. It also provides mobile cranes in ports that are seen as a critical part of U.S. infrastructure.

Doubt regarding the buyout was raised in January when Reuters reported a Zoomlion-Terex deal could be blocked by the Committee on Foreign Investment in the United States (CFIUS).

Zoomlion has said it is confident its deal with Terex would win regulatory approval, although a number of offers from Chinese companies to buy or invest in U.S. companies have fallen through due to concerns about national security.

Source: Reuters

x
expand_less