U.S. regulators are reportedly raising objections that Cosco Shipping, a state-run Chinese company, could take control of a container terminal at the Port of Long Beach, Calif., as part of its $6.3 billion acquisition of another company.
The concerns were raised by the Committee on Foreign Investment in the United States, according to a report in the Wall Street Journal, which cited unidentified sources.
The committee, which is chaired by the Treasury Department and focuses on national security, is reviewing Cosco's planned acquisition of Orient Overseas International because that Hong Kong company has some assets in the U.S., a Cosco vice chairman said.
The assets include a nearly fully automated terminal known as the Long Beach Container Terminal, for which Orient Overseas has a long-term lease.
According to the Journal, Cosco executives have proposed to divest or carve out the Long Beach terminal, though it's not clear that would be enough to satisfy concerns over the multibillion-dollar deal.
Cosco did not respond to an email seeking comment. A Treasury spokesman declined to comment, noting that the department is prohibited by statute from publicly disclosing information filed with CFIUS.
The review follows President Donald Trump's March rejection of Singapore-based Broadcom's planned purchase of Qualcomm after CFIUS raised concerns that the San Diego chipmaker would be weakened, leading China to gain an upper hand in 5G technology.
