Pentagon insists it is open to foreign investment in the U.S.

Sat Aug 31, 2013 1:20am EDT
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By Andrea Shalal-Esa

WASHINGTON (Reuters) - The Pentagon is taking a harder look at proposed foreign acquisitions of U.S. companies given the increasing financial complexity of such deals, but continues to encourage foreign investment, a top U.S. defense official said this week.

"If you have a deal that is in the interest of the U.S. economy and does not impinge on national security, we will approve it," said Brett Lambert, the Pentagon's representative on an interagency committee that reviews foreign takeovers.

Lambert, who retires Saturday after four years as the deputy assistant secretary of defense for manufacturing and industrial policy, bristled at the suggestion that the Committee on Foreign Investment in the United States (CFIUS) was making it difficult for foreign investors to acquire U.S. companies.

"It's completely the opposite," Lambert told Reuters in an interview on Tuesday.

He said foreign interest in U.S. companies remained high, given the continued importance of the U.S. defense market despite recent budget cuts, and said he expected the number of foreign transactions reviewed by CFIUS to double in coming years from more than 100 last year.

"You have foreign capital that wants to come in, which we want, which we encourage. The question is how do we allow that foreign capital to come in while protecting national security," Lambert said.

He acknowledged that the Defense Department and other agencies involved in the CFIUS review process were often taking longer to review transactions but said that was largely because of the increasing complexity of the transactions.

Lambert said high-profile cases that were rejected tended to generate headlines but the majority of cases were approved, including some with conditions.   Continued...

An aerial view of the Pentagon building in Washington, June 15, 2005.