Congressman Warns: China Attempting Takeover Of American Military Company


ZoomLion Seeking to Buy U.S. Military Supplier

Zoomlion Heavy Industry, a Chinese government owned heavy equipment supplier to the People’s Liberation Army, recently issued an unsolicited offer to actually buy Terex Corporation. The proposal is being questioned by U.S. representatives and should be rejected out of hand. The potential for the Chinese to own a U.S. company that supplies critical military equipment and then stopping delivery or even sabotaging the products is just to great a risk to take. And certainly the problem of spying by embedding stealth devices or equipment into products that would be made by the Chinese company would be too great a risk to allow.

GOP Rep. Duncan Hunter of California wrote a letter Wednesday to Treasury Department Secretary Jacob Lew, urging him to look into the details of the potential transaction.

“It has come to my attention that Terex Corporation, an American Company that manufactures heavy equipment, including cranes for the Army, Navy and other government agencies, has received an unsolicited takeover bid,” he wrote, adding, “the fact that a leading PLA supplier is seeking to purchase an American company that provides critical infrastructure equipment to a number of government agencies, including the Department of Defense and the Department of Homeland Security, demands that the agreement undergo thorough scrutiny if it does materialize.”

In a remarkable display of confidence, Zoomlion stated that it was sure that its bid would sail past the regulatory approval process, which is exactly what sparked concern from Hunter, who wants the Committee on Foreign Investment in the United States to closely examine the deal, as the committee has the authority to block the bid. Jacob Lew sits as chair of the committee.

The Zoomlion bid comes in at $30 a share and 40 percent of the transaction would be financed in cash, and the other 60 percent through debt financing. However, the company admitted in January that because of economic woes in China, net profit for 2015 would plummet.

While private corporations should be allowed to conduct their business in a way that provides profit and the company and its share holders with little interference from the government, in cases such as Terex there must be a strong consideration of what the impact there would be in selling the company to an avowed enemy of the United States.

Zoomlion made all the proper assurances that the merged companies would make for a stronger global enterprise and that the deal would “create value for its customers, shareholders, employees as well as all stakeholders,” but the Chinese cannot be trusted to conduct business without having political overtones color how the enterprise is run. This offer should be rejected out of hand, either by Terex, or by the U.S. government itself. In this case, U.S. safety and security should override any consideration of profits to be made.

Source: dailycaller.com

 



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