WASHINGTON — If a Chinese company wants to buy part of an Italian-controlled automaker that's incorporated in the Netherlands and headquartered in the United Kingdom, it will still have to get past a national-security review by the U.S. government.
And it wouldn't be an easy hurdle to overcome.
The Committee on Foreign Investment in the United States, an interagency working group led by the U.S. Treasury Department, is responsible for reviewing deals that affect control of U.S. businesses and brands, even if the parent company is overseas, as in the case of Fiat Chrysler Automobiles, and even if the affected business lacks obvious defense ties. The reviews can last a month or more, and deals involving Chinese partners can be tied up even longer.
Automotive News has learned that at least one Chinese carmaker is making initial preparations for a possible filing with the group.
As Automotive News reported this month, China's Great Wall Motor Co. is interested in buying FCA's Jeep brand, and other Chinese automakers have explored a possible acquisition of FCA, which is seeking merger partners to help it compete with deep-pocketed global rivals.
Chinese buyers of U.S. companies have received greater scrutiny from security officials in recent years, and the trend has increased substantially under a Trump administration that has promoted economic nationalism and criticized China's trade policies. Under such conditions, authorities are expected to apply an expansive definition of national security to justify an investigation, especially when it involves a well-known auto manufacturer with iconic American brands such as Jeep, Dodge, Ram and Chrysler.
Whether any such deal would pass muster with U.S. authorities is an open question.
"We have seen a number of transactions, particularly involving Chinese companies, where one might have thought there is no national-security interest, but the government has expressed concerns" and even contributed to deals falling apart, an international trade attorney intimately familiar with the process told Automotive News.