Biden could kill Musk’s Twitter deal if US does security review

• US officials are considering a national security review of Elon Musk’s Twitter deal, Bloomberg reported.
• President Biden can block the acquisition if a formal review recommends he do so.
• Musk tried to back out of the deal this summer, and Twitter sued him.

The U.S. government is reviewing national security assessments of some of Elon Musk’s ventures, including his Twitter takeover deal, Bloomberg reported Thursday, citing people with knowledge of the matter.

Musk’s plans to buy 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 worried Biden administration officials, said the people of Bloomberg.

Officials are considering what tools they can use to review Musk’s ventures, including action by the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign takeovers of American businesses, according to Bloomberg.

CFIUS conducts security reviews if a “transaction threatens to impair the national security of the United States,” according to federal regulations. When reviewing a transaction, CFIUS can recommend to the president that a deal be suspended or prohibited, according to the regulations.

If the Twitter acquisition were to be reviewed by CFIUS for national security reasons, the agency could recommend to President Biden that he cancel the deal — something Musk himself has tried and failed to do in recent months.

Presidents have killed deals in the past on the recommendation of CFIUS. In 2019, former President Donald Trump blocked Beijing Shiji Information Technology Co’s attempt to acquire hotel management platform StayNTouch following a CFIUS recommendation.

After offering to buy Twitter in April, Musk tried to back out of the deal, claiming the social media platform had failed to comply with its commitment to disclose the number of bots on the platform. Shortly after his reversal of the acquisition, Twitter sued Musk, accusing him of defaulting on his obligations. The billionaire in October again offered to buy Twitter for 44 billion dollars.

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

One Twitter user responded to a post about the Bloomberg article, saying “it would be hysterical if the government stopped Elon from overpaying for Twitter.” Musk black to the tweet with the “100” emoji and a rolling-on-the-floor-laughing emoji.

“Consistent with law and practice, CFIUS does not comment publicly on transactions that it may or may not review,” an agency spokesperson told Insider.

Bloomberg reported people familiar with the security review discussions as saying the talks were at an early stage.

SpaceX’s Starlink network could also be subject to a national security review, the same people said.

Biden officials were concerned after Musk tweeted one peace plan which appeared to hide the Kremlin’s talking points. It also followed SpaceX’s warning that the company may have to stop supplying Starlink to Ukraine, according to Bloomberg.