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Xcerra to resubmit China-backed deal for U.S. review

By Liana B. Baker

SAN FRANCISCO (Reuters) - U.S. semiconductor testing company Xcerra Corp said on Thursday in a filing that it would resubmit its deal to be acquired by a Chinese state-backed semiconductor investment fund to give U.S. regulators more time to review the transaction for national security concerns.

Xcerra announced in April that it had agreed to be bought for $580 million by Unic Capital Management, a subsidiary of China's Sino IC Capital and the Hubei Xinyan Equity Investment Partnership.

Xcerra will refile the deal with the Committee on Foreign Investment in the United States (CFIUS), a government panel that reviews acquisitions by foreign entities for potential national security risks. CFIUS has cracked down on technology deals related to the semiconductor industry, and deals such as Lattice Semiconductor Corp's sale to a China-backed private equity firm ended up blocked by the White House earlier this year.

"We have been working constructively with CFIUS during the review period to ensure the committee fully understands our business and our industry. However, the committee has indicated that it could use additional time to make a final determination on the transaction," Xcerra's Chief Executive Dave Tacelli said in an e-mail to employees.

Refiling the deal with CFIUS resets the clock and gives it additional time of up to 75 days for it to complete its national security review. A CFIUS refile does not necessarily mean that a deal will be rejected, although it does indicate increased government scrutiny.

Massachusetts-based Xcerra designs and manufactures equipment to test semiconductors and circuit boards. It does not make semiconductors.

Sino IC shareholders include China Development Bank Capital, a unit of China Development Bank, a state-owned Chinese development bank; and China Mobile Ltd, China’s state-owned wireless carrier.

Other Chinese deals awaiting U.S. approval include Ant Financial's $1.2 billion purchase of U.S. money transfer company MoneyGram International Inc and China Oceanwide Holdings Group Co Ltd's $2.7 billion acquisition of U.S. insurer Genworth Financial Inc.

(Reporting by Liana B. Baker in San Francisco; Editing by Cynthia Osterman)