Biden Could Kill Musk’s Twitter Deal If US Mulls Security Review

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  • US officials are looking at a national security review for Elon Musk’s Twitter deal, sources told Bloomberg.
  • President Biden could end Musk’s acquisition of Twitter if the security review goes ahead.
  • Musk tried to back out of the deal this summer, and Twitter sued him.

The US government is weighing national security reviews for some of Elon Musk’s ventures, including his Twitter takeover deal, Bloomberg reported on Thursday, citing people with knowledge of the matter.

Musk’s plans to purchase Twitter for $44 billion with the help of foreign investors, including Saudi Arabia’s Prince Alwaleed bin Talal, Qatar’s sovereign wealth fund, and Binance Holdings which was founded by a Chinese businessman, have concerned Biden administration officials, the people told Bloomberg.

The government was considering which tools they could use to review Musk’s deals, the people added. The Committee on Foreign Investment in the US (CFIUS), which is run by the US Treasury Department and reviews foreign buyers’ acquisitions of American businesses, could be an option, per Bloomberg.

The CFIUS carries out security reviews if a “transaction threatens to impair the national security of the United States,” according to federal regulations. When reviewing a transaction, the CFIUS can recommend to President Joe Biden that the deal be suspended or prohibited, per the regulations.

If the Twitter deal is reviewed by CFIUS for national security reasons, as reported by Bloomberg, Biden has the ability to stop the acquisition from going ahead. In recent months, Musk had requested the deal be called off.

Presidents have killed deals in the past. In 2019, former President Donald Trump prohibited Beijing Shiji Information Technology Co’s attempts to acquire hotel management platform StayNTouch after a recommendation from CFIUS, Reuters reported. 

After initially offering to buy Twitter in April, Musk tried to abandon the deal, claiming the social-media platform had failed to comply with its obligation to disclose the number of bot accounts on the site. Shortly after his reversal on the acquisition, Twitter sued Musk, accusing him of not honoring his obligations. The billionaire in October offered again to buy Twitter for $44 billion.

Twitter shares fell 13% premarket after Bloomberg’s report on Thursday.

A Twitter user replied to the Bloomberg article, saying “it would be hysterical if the government stopped Elon from over paying for Twitter.” Musk replied to the Twitter user’s tweet with the 100 emoji and the rolling on the floor laughing face emoji.

“Consistent with law and practice, CFIUS does not publicly comment on transactions that it may or may not be reviewing,” a Treasury Department spokesperson told Insider.

The people with knowledge of the matter told Bloomberg that the discussions about security reviews were at an early stage.

SpaceX’s Starlink internet network could also be subject to a national security review, the people said. Biden officials were concerned after Musk tweeted a peace plan that seemed to parrot the Kremlin’s talking points. It also followed SpaceX’s warning that the company might have to stop providing Starlink to Ukraine, people familiar with the situation told Bloomberg.

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