Chinese genome research and sequencing company BGI-Shenzhen has finalized its $117 million purchase of genome sequencing company Complete Genomics Inc., marking the first acquisition of a U.S. public company by a Chinese acquirer.
The deal will likely lead to more Chinese investment in U.S. companies, attorneys for both sides say.
A cross-border team at O'Melveny & Myers advised BGI, while attorneys at Latham & Watkins, led by corporate partner Alan Mendelson, advised Complete Genomics. The O'Melveny team was led by corporate partners Paul Scrivano in Menlo Park, Calif., and Wendy Pan in Shanghai.
Latham M&A partner Luke Bergstrom and associate David Wheeler also advised Complete Genomics.
O'Melveny capital markets partner David Johnson Jr. in Hong Kong and regulatory partners Theodore Kassinger and Jonathan Sallet in Washington, D.C., also worked on the deal.
"This is the first deal to show that [the Committee on Foreign Investment in the United States] is not a barrier to Chinese deals," Scrivano said. Comprised of 16 U.S. departments and agencies including the Defense, Treasury, State and Homeland Security departments, the committee, or CFIUS, reviews foreign investment in U.S. for national security concerns.
Buying companies in industries such as telecommunications, defense and high technology will still be "fraught with peril," but a majority of deals will get the go-ahead, Scrivano said.
Chinese acquirers will likely continue to face more CFIUS scrutiny than others, but this deal should give the green light to other companies in China. From the start, the BGI deal had a CFIUS clause stating that both sides could walk away if approval wasn't granted, Scrivano added.
Mendelson is also expecting cross-border Chinese activity to pick up, saying that Latham is currently advising another Chinese acquirer on a purchase of a Silicon Valley company that could be announced shortly.
BGI and Complete Genomics first announced their deal back in September for $3.15 per share, and the negotiations were hampered for a time by an unsolicited $3.30 bid from Illumina Inc.