The President today decided against intervening in the proposed acquisition of Monsanto Electronic Materials Company (MEMC) by Huels AG of West Germany. MEMC manufactures silicon wafers for use in making semiconductors.
The President based his decision on the results of the investigation by the Committee on Foreign Investment in the United States (CFIUS), chaired by Treasury Secretary Nicholas Brady. The CFIUS conducted a thorough investigation of various issues related to silicon wafers, including reliability of supply, technology transfer, and the relationship of the transaction to the semiconductor industry research consortium SEMATECH. CFIUS staff and policy-level officials also met with representatives of SEMATECH, of Monsanto, and of Huels.
The Huels-MEMC investigation was the first formal investigation by the CFIUS under section 5021 of the Omnibus Trade and Competitiveness Act of 1988. That provision, known as the Exon-Florio provision, authorizes the President to investigate and, if necessary, to suspend or prohibit a proposed foreign acquisition of a U.S. business engaged in U.S. interstate commerce. The criteria to suspend or prohibit are that the President must find:
credible evidence to believe that the foreign investor might take actions that threaten to impair the national security, and
that existing laws, other than the International Emergency Economic Powers Act and the Exon-Florio provision, are inadequate and inappropriate to deal with the national security threat.