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Panel Could Block China's Bid to Buy Unocal by Citing National Security

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posted on Jun, 24 2005 @ 09:20 PM
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Even if Unocal accepts the $18.5 billion bid from the state owned Chinese corporation CNOOC the deal may still be shot down by a United States review panel. The Committee on Foreign Investment in the United States, or CFIUS, has the ability to nullify the deal depending on how they define "national security" Under a 1998 law the President of the United States can deny a foreign acquisition of a corporation if a CFIUS review finds either the foreign entity seeking the acquisition poses a threat to national security or relevant laws do not provide adequate protection of national security.
 



www.reuters.com
If Unocal Corp. accepts an $18.5 billion takeover by China's CNOOC Ltd. the deal's fate may hinge on how a secretive U.S. review panel defines "national security," experts said on Friday.

"The primary question for this transaction is whether they consider energy security to be a national-security issue," said Michael Wessel, a Democrat and a member of the U.S.-China Economic and Security Review Commission.




Please visit the link provided for the complete story.


With China emerging as a superpower and the current state of the oil market it seems highly unlikely that CFIUS will allow this deal to proceed. However, if CFIUS does prevent the deal from going through how will the relations between the US and China be affected? If CFIUS allows the deal to proceed and China gains a larger foothold in the oil market how badly will the USA feel the effects? I am well aware there are more questions here than answers but, for now cautious questioning seems more logical than wild guesses.

Related News Links:
www.marketwatch.com
business.timesonline.co.uk
www.usatoday.com

[edit on 24-6-2005 by BlackJackal]

[edit on 27-9-2005 by DJDOHBOY]




posted on Jun, 24 2005 @ 11:45 PM
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This could have unintended consequences if they block China's purchase as it makes it easier for other countries to block the sale of their companies to foreigners.



posted on Jun, 24 2005 @ 11:46 PM
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Unless I am mistaken George Schultz is on the Chveron board. Ill bet you dollars to dounuts that Cheveron ups its bid to keep Unocal in US controll.

Sorry Schultz is on Bechtels here is the list of directors for Chevron:
(Check out this power group a who's who of power connections and graft)

David J. O'Reilly
Chairman of the Board

Peter J. Robertson
Vice Chairman of the Board

Samuel H. Armacost
Chairman of SRI International

Robert E. Denham
Partner of Munger, Tolles & Olson, LLP

Robert J. Eaton
Former Chairman of the Board of Management of DaimlerChrysler AG

Sam Ginn
Private Investor, Former Chairman of Vodafone

Carla Anderson Hills
Chairman and Chief Executive Officer of Hills & Company International Consultants

Franklyn G. Jenifer
President of The University of Texas at Dallas

Sam Nunn
Co-chairman and Chief Executive Officer of the Nuclear Threat Initiative, former U.S. Senator from the State of Georgia

Charles R. Shoemate
Former Chairman, President and Chief Executive Officer of Bestfoods

Ronald D. Sugar
Chairman of the Board, Chief Executive Officer and President of Northrop Grumman Corporation

Carl Ware
Senior Advisor to the CEO of The Coca-Cola Company





[edit on 6/24/05 by FredT]



posted on Jun, 27 2005 @ 12:53 PM
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Man, whatever happened to capitalism and free markets?

Tho perhaps the move is justified, since the Chinese are communists and have a centrally planned economy.



posted on Jul, 7 2005 @ 10:57 AM
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With China's ever increasing need for oil I would expect this is not the last time we will hear about storys like this.



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