Last week Crain’s Chicago had a story on the sale of a local titanium powder company, International Titanium Powder LLC (ITP) to a Maryland based firm, Cristal U.S. Inc (owned by Cristal Global, a Saudi company). It wasn’t a typical M&A story of so and so bought such and such. The article stated that the sale raises national security questions, specifically: “experts say federal regulators will examine the implications of foreign control of a new low-cost technology for making titanium.” But the controversy also revolves around a $10m grant from the Defense Advanced Research Projects Agency, received by ITP to develop a new technology.
So the real question is this: Does this acquisition create a national security threat under a new federal law passed after the Dubai port debacle?
According to Congresswoman Carolyn Maloney the National Security Foreign Investment Reform and Strengthened Transparency Act of 2007 seeks to do a number of things including: “requiring an investigation of the national security impact of every acquisition by a foreign government” among many other sign-offs and approvals. In addition to looking at the national security question, the law is designed “Both to ensure national security and to avoid arbitrary and unfair decisions, Congress should insist that key factors such as whether critical infrastructure is affected, or whether the acquiring company is owned by a federal government be expressly addressed.”
Since Cristal Global is a private firm owned by National Industrialization Co. and Gulf Investment Corp, the acquisition would most definitely not violate the law on that count. Furthermore, since ITP has no defense contracts, according to the Crain’s article, and has made only small amounts of titanium, it’s pretty hard to see how critical infrastructure could be affected. But who am I to say? I’ve seen stranger politics.