Shein Faces US Security Review Over $80 Million Everlane Acquisition
SCMP · 1 SOURCESabout 2 hours ago2 MIN
Summary
US authorities are conducting a national security review of Shein Global Holdings' acquisition of American clothing retailer Everlane after the company sought approval for the deal, according to people familiar with the matter. The review by the Committee on Foreign Investment in the United States (Cfius), an inter-agency panel led by the Treasury Department, began after the $80 million transaction was completed in May. Shein voluntarily initiated the review at that time, which is unusual as companies typically seek Cfius approval before a transaction closes. Clearance by Cfius usually prevents future challenges but the body also has the power to block, unwind or impose conditions on transactions it determines threaten US national security .
Key Points
- Shein Global Holdings completed its $80 million acquisition of Everlane in May and subsequently requested Cfius review
- The inter-agency review is led by the Treasury Department and focuses on potential national security issues linked to Americans' personal data
- Shein maintains substantial operations in China despite relocating its headquarters to Singapore several years ago
- The company remains subject to Chinese regulators, whose approval was required for its Hong Kong IPO launched on Monday
- Cfius has the power to block, unwind or impose conditions on transactions it determines threaten US national security
Why It Matters
The Cfius review adds to a growing list of regulatory hurdles for Shein in one of its most important markets, as the US remains among the company's top markets for sales. Personal data has become an increasingly sensitive national security issue worldwide, especially in the context of US-China rivalry with both countries seeking to limit the other's access to citizens' information .
The Cfius review adds to a growing list of regulatory hurdles for Shein in one of its most important markets, as the US remains among the company's top markets for sales. Personal data has become an increasingly sensitive national security issue worldwide, especially in the context of US-China rivalry with both countries seeking to limit the other's access to citizens' information .