Britain-based Imagination Technologies was acquired by China-based Canyon Bridge Capital Partners that was barred just a week ago by the U.S. President from purchasing a chipmaker in the U.S.
The deal, which is all-cash is for £550 million or $742 million, shows that Canyon Bridge continues to be focused on acquiring chip makers in the West after its deal for $1.3 billion to acquire Lattice Semiconductor in the U.S. was blocked by President Donald Trump over concerns of national security.
On Friday, Canyon Bridge announced it would pay for each Imagination share 182 British pence or close to a 42% premium to the closing price for the chipmaker on Friday.
However, this purchase will be contingent upon Imagination divesting MIPS, its chip designer based in the U.S., which Imagination acquired in 2013, said the two companies through a joint statement on Friday.
Keeping MIPS would mean that the acquisition by Canyon Bridge would have to be reviewed by CFIUS, the U.S. Committee for Foreign Investment in the U.S., the same government panel that rejected its Lattice acquisition.
Imagination announced that it was selling MIPS to Tallwood Venture Capital for $65 million. It was not clear if the divestment would be subject to a review by CFIUS since Tallwood has offices in both California and China.
Canyon Bridge was started using capital from the central government of China and had indirect links to the space program in Beijing, Currently it manages close to $1.5 billion for Yitai Capital, a state-own business in China.
Imagination makes graphics that power the iPhone, and licenses video-processing and graphics technology to companies in the semi-conductor industry.
However, shares in the at one time great tech success story for Europe, plunged in April after Apple, its largest client said it would no longer uses its graphics technology for any new products, which caused shares to plummet 70%.
Currently Imagination and Apple are in a legal battle over royalties.
Lattice makes chips call field-programmable gate arrays that allow companies to put their software on chips for different uses.
It does not sell its chips to the military in the U.S., but it largest two rivals Intel Corp’s Altera and Xilinx make chips that are used in U.S. military technology.
Following the decision by Trump to bar the sale of Lattice to Canyon Bridge, the U.S. secretary of treasury Steven Mnuchin said Trump’s move reflected the concerns about intellectual property transfer, the role of Beijing in the deal, the importance of integrity in the supply chain for semiconductors to the government of the U.S. and the use of products at Lattice by the U.S. government.