WASHINGTON — A leading Israeli firm has abandoned its bid to acquire
a U.S. defense contractor in the wake of the major controversy over U.S. approval of United Arab Emirates
operations of six major U.S. ports.
Executives said Check Point decided not to pursue plans to buy the U.S.
software firm Sourcefire for $225 million after objections were raised by the U.S.
intelligence community. Sourcefire has been a leading supplier to such
intelligence agencies as the CIA and FBI, Middle East Newsline reported.
"Certain members of the committee have outstanding concerns that there's
potential risks to national security were the transaction to proceed,"
Treasury Department spokesman Tony Fratto said.
The Committee on Foreign Investment in the United States, which reviews
proposed foreign takeovers of U.S. companies, has been investigating
Checkpoint, with headquarters in Ramat Gan, Israel. Executives said CFIUS
was believed to have drafted a recommendation to block the acquisition of
Sourcefire on grounds of national security.
"The timing for this acquisition may have been bad, and given the
respective technologies it became complex," Checkpoint said in a statement.
The pullout by Checkpoint, less than six weeks after it announced
acquisition plans, came in wake of CFIUS approval of United Arab Emirates
operations of six major U.S. ports.
In a move that sparked opposition in
Congress, CFIUS approved the purchase by the UAE state-owned Dubai Ports
World of the London-based Peninsular and Oriental Steam Navigation Co.,
which manages the ports of Louisiana, New York, New Jersey, Miami and
Baltimore.
Amid congressional threats to block the DP World takeover, CFIUS has
undertaken an additional 45-day review of deal. At the same time, DP World
said it would transfer port operations to a U.S. firm.
Officials have long expressed concern over the activities of Israeli
firms in the U.S. defense and security market. They said Israeli activity
could result U.S. technology leakage and industrial espionage.
The privately-held Sourcefire, reported to have earned $30 million in
2005, has produced software designed to protect networks from attacks.
Executives said 13 percent of its revenues stem from the Defense Department.
