President Trump bars Chinese firm from buying U.S. chipmaker Lattice (LSCC)

Lattice Semi and Canyon Bridge Capital Partners terminate merger agreement 

• Lattice Semiconductor announced the termination of the acquisition by Canyon Bridge Capital Partners, of Lattice Semiconductor following an order from the President of the United States.
• The Committee on Foreign Investment in the United States referred the transaction with Canyon Bridge to the U.S. President for a decision, having been unable to come to an agreement with the parties on mitigation measures.
• After consideration, the President prohibited the proposed transaction on the recommendation of CFIUS in an executive order dated September 13.

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(Reuters) - U.S. President Donald Trump blocked a Chinese-backed private equity firm from buying a U.S.-based chipmaker on Wednesday, sending a clear signal to Beijing that Washington will oppose takeover deals that involve technologies with potential military applications.

Canyon Bridge Capital Partners' planned $1.3-billion acquisition of Lattice Semiconductor Corp (LSCC) was one of the largest attempted by a Chinese-backed firm in the U.S. microchip sector and was the first announced deal for the buyout fund, which launched last year with a focus on technology investment.

U.S. regulatory scrutiny grew after Reuters reported in November that Canyon Bridge was funded partly by capital from China's central government and had indirect links to its space program.

U.S. defense officials subsequently raised concerns about the Lattice acquisition by a firm backed by the Chinese government.

Portland, Oregon-based Lattice makes chips known as field-programmable gate arrays, which allow companies to put their own software on silicon chips for different uses. It said it no longer sells chips to the U.S. military, unlike its two biggest rivals, Xilinx Inc (XLNX) and Intel Corp's (INTC) Altera.

Trump said in an executive order that Lattice and Canyon Bridge "shall take all steps necessary to fully and permanently abandon the proposed transaction" within 30 days.

Trump's decision chimes with the views of the Committee on Foreign Investment in the United States (CFIUS), which scrutinizes deals for potential national security threats.