Knowing it is impossible but doing it anyway, even if there are millions against me, I will go forward. In today's global political and economic landscape, this saying has taken on a particularly apt meaning. For Chinese companies aiming to cross the Pacific and acquire controlling stakes in U.S.-listed companies, they are not unfamiliar with risks or lacking in judgment; rather, they recognize that this is a tough battle but still choose to face it head-on.
The heart of the battle lies in four letters: CFIUS.
The Committee on Foreign Investment in the United States (CFIUS), often referred to as Committee on Foreign Investment in the United States, is a seemingly ordinary federal agency that has become the ultimate gatekeeper for Chinese companies seeking to acquire U.S. assets. Over the past decade, from TikTok's pursuit and blockade to the collapse of several semiconductor deals, CFIUS has evolved from an approval body into a key front in the economic rivalry between China and the United States.
However, the story doesn't end there. Despite the stringent scrutiny from CFIUS, Chinese companies continue to seek loopholes in the regulatory framework. Capital is inherently mobile and profit-driven, and it will find a way around any obstacles. In this battle of wisdom, endurance, and strategic design, Goheal has repeatedly taken the lead, leveraging our extensive cross-border experience to open capital channels for clients to access the Nasdaq and the New York Stock Exchange.
American Goheal M&A Group
At the end of 2024, a piece of news caused great shock in the investment circles of China and the United States: an industrial automation enterprise headquartered in Shanghai successfully acquired the control of a listed company on the main board of the United States, with a transaction value of up to $700 million. The key is that ——CFIUS approved!
After being shocked, many people began to shine in their eyes, "Can you still do it now? How did you do it?"
Frankly, this is not an isolated case, but a typical example of how Chinese companies have leveraged U.S. assets through legal and compliant channels. But the story behind this victory goes far beyond just "luck".
Let's start by breaking down CFIUS's "taboos."
CFIUS is essentially a national security review mechanism. Its focus on foreign acquisitions of U.S. companies primarily centers on several key areas: semiconductors, artificial intelligence, communication infrastructure, biotechnology, energy, power grids, aerospace, and companies that handle large amounts of personal data. Moreover, not only the entity itself but also 'indirect control' and 'data access rights' can trigger CFIUS's' red alert.'
In other words, whether you control the company through a protocol, a shadow director, or a proxy stake, if you can "actually control" the American company, don't expect to get away with it easily.
So the question is: Can Chinese capital succeed in a controlling takeover with CFIUS stalking it?
The answer is yes, but do it well.
Goheal In many cases, the "precise design" of the following three dimensions is the key to break through.
First, it involves the industry's' de-sensitization. 'In simpler terms, this means avoiding industries that are high-risk for CFIUS. This does not mean you should only seek opportunities in' low-tech' sectors; rather, it involves identifying gray areas that, while technologically advanced and profitable, do not pose a threat to national security. These areas include enterprise service software, vertical industry SaaS, and some older manufacturing equipment providers.
In one successful acquisition, we helped a leading Chinese medical device company circumvent CFIUS restrictions by acquiring a US company that specializes in "non-core equipment leasing" and ultimately achieving indirect ownership while avoiding a lot of potential scrutiny.
Second, the structural 'de-China-invested' approach. This is not about hiding; rather, it involves using a multi-layer structure (Multi-tier SPV) and Hong Kong or Singapore PE fund platforms to dilute the 'Chinese investment footprint.' Sometimes, this can be achieved by using third-country investors, such as Middle Eastern sovereign funds or European and American partnership funds, as surface-level investment vehicles, with the Chinese side signing repurchase or profit-sharing agreements behind the scenes to indirectly gain actual control.
In this regard, Goheal is deeply engaged in "structural aesthetics" and helps customers design a delivery path that is both "visible" and "hidden", which is a combination of art and strategy.
Third, it is about communication to ensure strong compliance. CFIUS is not a monolithic entity; it acts as both a regulatory body and a 'negotiator.' Over the past few years, Goheal has maintained close communication with several key CFIUS personnel, gaining a deep understanding of the review logic, language, and window period strategies. When preparing transaction materials, we thoroughly prepare in advance, breaking down issues such as investment motives, control arrangements, technical applications, and employee stability, and expressing them in language that aligns with American standards——This is not just 'translation,' but also 'cognitive output.'
But breaking out is not the end of victory. The real challenge often begins when you get your hands on control.
The governance structure of US listed companies is complex, independent directors are powerful, and information disclosure is transparent and frequent. A little "misunderstanding" may lead to class action lawsuits. After Chinese enterprises take control, how to integrate management culture, protect market value and connect with American investors is a new proposition.
Not to mention that when the "wind blows", the media, short-sellers and antitrust authorities in the market who are suspicious of Chinese acquisitions are always on the lookout for a blow.
Therefore, Goheal has always emphasized that if Chinese investors want to "gain a foothold" in the US stock market, they need to be a low-key capital manager. They should not change their name, change their CEO or adjust their strategy, nor should they be aggressive. Instead, they must stabilize market confidence and adhere to the bottom line of compliance.
In a number of successful deals, we have helped clients set up "US advisory boards", bring in local independent directors, regularly disclose governance restructuring plans and move forward with integration in a "moderate" way to avoid stirring up market sentiment.
So, at a time when CFIUS is getting tougher and market sentiment is increasingly complex, is it still necessary for Chinese companies to "look west"? The answer is yes.
Despite the high regulatory threshold and policy uncertainty, the US stock market is still the market with the strongest global liquidity, the highest financing efficiency and the most direct industrial connection. As long as you choose the right place, go the right way and talk steadily, you still have the hope to become the next "winner under CFIUS".
But only if you have a "battle map" of the depth of the map and a reliable "mariner" to navigate the sea.
That's exactly the role Goheal has been trying to play.
Goheal Group
We are both a capital player and a compliance bridge. We understand the ambitions of Chinese companies to 'go global' and the real logic of US regulation. Between East and West, we are willing to be the one who holds the kite string steady, helping you fly higher and farther in the global market.
In conclusion
Are you considering buying an American asset? Have you ever been put off by CFIUS's "cold wind"? Are you eager to unlock the next "golden key" to cross-border mergers and acquisitions?
We welcome you to tell us your views and questions about "Chinese holdings of US stocks" in the comments section. Goheal will continue to bring you first-hand case analysis and strategy decryption. We welcome your comments, we are waiting for you to fight.
[About Goheal] Goheal is a leading investment holding company specializing in global mergers and acquisitions. It focuses on three core business areas: the acquisition of control in listed companies, mergers and acquisitions, and capital operations. With its deep expertise and extensive experience, Goheal provides comprehensive lifecycle services, from mergers and acquisitions to restructuring and capital operations, aiming to maximize corporate value and drive long-term growth.
