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Trump Blocks Chinese Deal for U.S. Software Firm StayNTouch

David McLaughlin

(Bloomberg) -- President Donald Trump ordered the Chinese acquisition of a hotel property management software company reversed on national security grounds.

Trump ordered Beijing Shiji Information Technology Co. to unwind its 2018 acquisition of StayNTouch Inc., the White House said in a statement on Friday.

Trump said there was “credible evidence” the Chinese company “might take action that threatens to impair the national security of the United States.”

The order marked the third time Trump has blocked a foreign takeover of a U.S. company on national security grounds, and just the sixth time a U.S. president has done so in three decades.

The Trump administration has ramped up scrutiny of Chinese acquisitions of American businesses over risks to national security. The panel that reviews foreign investments in U.S. firms, the Committee on Foreign Investment in the U.S., has thwarted a number of Chinese deals, especially for technology companies.

CFIUS has raised security concerns about Infineon Technologies AG’s proposed acquisition of Cypress Semiconductor Corp., and has recommended the Trump block it, Bloomberg News reported on Thursday.

The Trump administration previously blocked a Chinese deal for Lattice Semiconductor Corp. and Broadcom Inc.’s hostile bid for Qualcomm Inc. Although Broadcom was based in Singapore at the time, the administration cited fears that the deal would harm innovation by Qualcomm and give China an edge in developing wireless technology.

Beijing Shiji provides software for the hospitality, food service, retail and entertainment industries. The White House order doesn’t specify the national security risks at issue, but said Beijing Shiji is prohibited from accessing hotel guest data through StayNTouch, which is based in Bethesda, Maryland.

(Updates with order in fourth paragraph.)

--With assistance from Jenny Leonard.

To contact the reporter on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Ros Krasny

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