CFIUS reviews Shein’s purchase of Everlane over national security concerns
The Committee on Foreign Investment in the United States (CFIUS) has launched a review of Shein Global Holdings’ acquisition of U.S. clothing retailer Everlane over national security concerns. The $80 million deal was completed in May, and Shein voluntarily approached the committee only after its completion, The Japan Times reports, citing Bloomberg sources familiar with the matter.
Review after the deal was completed
CFIUS is an interagency body chaired by the U.S. Treasury Department that assesses national security risks in transactions involving foreign investors. Companies typically approach the committee before a deal is completed, but Shein filed its notice after acquiring Everlane.
CFIUS approval usually prevents future challenges to a deal. At the same time, the committee can block transactions, require them to be unwound, or impose conditions on deals that it believes pose a threat to national security.
According to one of the publication’s sources, the review concerns potential risks related to Shein’s acquisition of a company that processes Americans’ personal data. What decision CFIUS will make is currently unknown. The committee’s reviews are confidential, and the U.S. Treasury Department did not respond to a request for comment.
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The company’s position and other allegations
A Shein spokesperson said the company seeks to comply with all laws and regulatory requirements in the markets where it operates. According to a source close to the deal, the parties acted quickly because of Everlane’s financial situation, and the filing with CFIUS was not a response to intervention or a request from U.S. authorities.
Shein was founded in China, although it moved its headquarters to Singapore several years ago and maintains significant operations in China. The United States remains one of the company’s key sales markets.
The company has also faced regulatory and legal claims in the United States. Texas Attorney General Ken Paxton filed a lawsuit in February accusing Shein of illegally selling toxic products to consumers and disclosing Americans’ personal data to the Chinese government. Shein said it strongly disagrees with these allegations and is challenging the lawsuit.
