In an Executive Order, President Trump blocked a Chinese technology company's acquisition of StayNTouch, Inc., a U.S. hotel property management software company.

On March 6, 2020, President Trump issued an Executive Order ("Order regarding the Acquisition of StayNTouch, Inc. by Beijing Shiji Information Technology Co., Ltd.") stating that (i) there was credible evidence that the acquisition by China-based Beijing Shiji Information Technology Co., Ltd. ("Shiji") of StayNTouch, Inc. ("StayNTouch") may pose a threat to U.S. national security and (ii) the authority under the International Emergency Economic Powers Act does not extend far enough to protect national security if Shiji were to acquire StayNTouch. As a result of those findings, President Trump ordered that the acquisition of StayNTouch by Shiji be prohibited and that Shiji's ownership interest in StayNTouch be divested within 120 days.

Separately, on March 9, 2020, Cypress Semiconductor Corp. announced that the Committee on Foreign Investment in the United States ("CFIUS") approved its merger with Infineon Technologies AG and determined that there were no unresolved national security issues related to the transaction.

Commentary 

President Trump's blocking of Shiji's acquisition of StayNTouch is his third such blocked transaction pursuant CFIUS, but only the fifth overall since 2012. Though reports indicate that Shiji sought to assuage CFIUS's concerns through various mitigation measures — including by claiming that it lacked access to StayNTouch's guest data — those measures clearly were not enough. Given the "black box" nature of the CFIUS process, it is difficult to pinpoint why the deal was blocked. The blocking, however, reinforces the view that CFIUS is particularly concerned about deals in which foreign companies potentially can obtain access to sensitive personal data of U.S. citizens (see also, for example, CFIUS's pressure on Beijing Kunlun Tech to divest itself of the dating app Grindr; see also Attorneys Analyze National Security Implications of Corporate Deals under FIRRMA). On the other hand, CFIUS's approval of Infineon Technologies AG's acquisition of Cypress Semiconductor Corp. is a reminder that CFIUS is willing to approve transactions involving potentially sensitive technology.