The news: The Chinese government is holding back approval for acquisitions that involve US tech companies to retaliate against sanctions.

• Beijing’s antitrust arm, SAMR, which reviews any deals involving two companies that have over $117 million in revenue in China, is making demands about how companies do business in China, per The Wall Street Journal.
• The strategy has slowed down the review process for mergers involving Intel’s $5.2 billion takeover of Tower Semiconductor and MaxLinear’s $3.8 billion purchase of Silicon Motion Technology.
• DuPont had to pay a $162.5 million termination fee over a failed $5.2 billion proposal to buy electronics-materials specialist Rogers Corp., which was scrapped because it failed to get past SAMR.

Bad for business: The US-China tech cold war could hurt US companies.

• Beijing has been retaliating against US trade restrictions in other ways, including by launching a cybersecurity probe of Micron’s chip imports, which sent China’s chip stocks soaring.
• Microsoft’s proposed $68.7 billion Activision Blizzard purchase and Broadcom’s plan to acquire VMware for $61 billion could be affected by SAMR’s stall strategy.
• US companies are incurring extra expenses for delayed and terminated deals, making their China-based counterparts more competitive.

What it takes to win: Beijing making good on its promise to strike back over the US chip ban and other restrictions raises questions about the wisdom behind the US’ approach.

• US policies from past decades to encourage China’s manufacturing sector at the expense of its own failed to anticipate present concerns about high-tech warfare.
• With US tech companies already struggling economically, fallout from the sanctions could impede the very tech innovation progress that the government wants.
• Companies have to choose between pulling out of China and losing out on a crucial market or pursuing riskier, costlier mergers.
• The US’ plans for more sanctions means Beijing will most likely explore other avenues for retaliation.

This article originally appeared in Insider Intelligence's Connectivity & Tech Briefing—a daily recap of top stories reshaping the technology industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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