Last Friday, Lexmark International Inc., a U.S. manufacturer of printers and imaging products, announced that its proposed $3.6 billion acquisition by a Chinese consortium has been given the green light by the Committee on Foreign Investment in the United States (CFIUS).  Just over a month ago, on August 22, 2016, CFIUS also approved the $43 billion takeover of Syngenta AG, a Swiss agriculture company with extensive U.S. production  and presence, by a Chinese state-owned enterprise, China National Chemical Corporation (ChinaChem). In light of the numerous Chinese investment deals that fell apart earlier this year due largely to CFIUS concerns, these two success stories are particularly encouraging.

In the recent years, CFIUS reviews have increasingly focused on Chinese investment into the United States. The United States remains one of the most attractive markets for Chinese companies looking to protect against asset devaluation in their own economy while securing technological upgrades in the process. However, Chinese officials have, in the past, indicated a sense that CFIUS is biased against Chinese investors. This sense appeared not entirely unfounded as CFIUS played a decisive role in halting three significant Chinese investment deals in the U.S. earlier this year.

So what made Lexmark and ChemChina-Syngenta deals different? One thing that may have helped is that in both cases, the companies decided to make a voluntary filing with CFIUS early on in the acquisition process and fully cooperated by providing extensive information relating to the transactions. The approval of these two deals indicates that it is possible for Chinese companies, even state-owned entities like ChemChina, to gain controlling shares of U.S. businesses as well as multinational corporations that are heavily enmeshed in the U.S. economy. The key is taking a proactive approach with regard to CFIUS concerns.

While the decision to file with CFIUS is completely voluntary, there have been enough major deals halted in the past due to CFIUS concerns to alert any company thinking about cross-border transactions to carefully and thoroughly consider CFIUS issues. Proactively seeking CFIUS approval, even where national-security implications may not be apparent, is much better than forging ahead with the deal only to get blocked by CFIUS down the road. This proactive approach is especially crucial for transactions involving technology, infrastructure, or entities located near U.S. government facilities or receiving U.S. government funding.

In short, companies that may be involved in mergers, acquisitions, or takeovers should always be cognizant of CFIUS issues. It is wise to plan ahead, do a thorough due diligence, and notify CFIUS of proposed transactions as early as possible, even if there do not appear to be major national security implications. This proactive approach avoids the time and expense of walking away from a deal, or dealing with forced divesture and mitigation requirements later in the deal.