Chinese bid for mapping company falls at US hurdle

Chinese seeking stake in Europe-based Here told to ‘apply directly’ to Trump 
By Yuan Yang in Beijing

Chinese investors seeking to buy a stake in a European mapping company were told to “apply directly” to the US president after their €241m offer failed to win regulatory approval, according to one of the bidders.
Beijing-based NavInfo, a mapping provider for tech giant Tencent, together with Tencent and Singapore’s sovereign wealth fund GIC agreed last year to buy a 10 per cent stake in Amsterdam-headquartered Here to provide high-resolution maps of China for autonomous cars.
The mapping technology company is owned by German carmakers Audi, BMW and Daimler, and US chipmaker Intel.
The Committee on Foreign Investment in the US weighed in on the deal, which received the green light from German regulators in January, due to Here’s assets in Chicago.
Cfius made NavInfo and its fellow investors go through multiple hoops, but did not ultimately approve the deal.
“[Cfius] didn’t stop us from reapplying again, and actually recommended we apply directly to US President Donald Trump,” said NavInfo.
“We think there are two main reasons: the whole atmosphere after the election has changed at Cfius, and we hear there are not enough employees,” the company added, suggesting the new and smaller team at Cfius was more likely to withhold approval. 
The Here decision comes at a time when China-US relations have been strained by Mr Trump’s harsh rhetoric against Chinese trade, as well as foreign policy disagreements over North Korea.
Mr Trump earlier this month blocked a $1.3bn plan by Canyon Bridge, a China-backed private equity group, to acquire Lattice Semiconductor.
Financial holdings company China Oceanwide is in the midst of re-filing an application to Cfius to acquire Virginia-based insurer Genworth Financial for $2.7bn.
As Beijing has moved to rein in an ambitious spate of offshore dealmaking by private groups, Chinese outbound investment by government-backed groups soared in the first half of the year to $28.7bn, despite scrutiny overseas over national security concerns.
“For the past six months [Cfius] has continuously asked us to change our application, but even the emails they gave us were very vague, and just mentioned ‘national security reasons’,” NavInfo said on Wednesday.
NavInfo said Cfius had told the consortium to refile its application, which it did, giving up investor rights such as shareholder votes, but the group still did not receive approval and does not understand why.
The consortium decided to drop the deal rather than apply directly to the US president, NavInfo said. The company added that although the decision changes its plans for shareholding, it will not affect its mapping projects with Here, with which it has a joint venture in China.
NavInfo said it will cancel the loan it had arranged with BNP Paribas to finance its part of the acquisition.
Tencent and GIC did not immediately respond to requests for comment.