Original URL: https://www.theregister.com/2006/03/24/checkpoint_sourcefire_deal/

Feds nix Check Point's Sourcefire bid

$255m deal sunk

By Christopher Williams

Posted in Channel, 24th March 2006 11:56 GMT

A takeover bid by an Israeli firewall firm has become the latest victim of US security protectionism. Check Point Software has dropped its bid for US rival Sourcefire after objections from the FBI and Pentagon were heard by the Treasury's Committee on Foreign Investments.

The Committee has also overseen the recent rumpus surrounding the Dubai carve-up of P&O, which would put Arab business in control of US ports.

Federal agency objections to the security software tie-up centre on the implementation of Sourcefire's anti-intrusion software 'Snort' by the Bureau and Department of Defense, AP reports. In private meetings between the panel and Check Point, FBI and Pentagon officials took exception to letting foreigners acquire the sensitive technology.

If the $225m deal had gone ahead as announced back in October, Check Point would have got the rights to all patents and source code. Check Point says the two companies will find ways round the roadblock. CEO Gil Shwed said: "We've decided to pursue alternative ways for Check Point and Sourcefire to partner in order to bring to market the most comprehensive security solutions."

Company lawyers had tried to salvage the deal by offering to attach conditions intended to satisfy the Feds, despite execs feeling they were onerous. Agreement could still not be reached.

The full Committee investigation into Check Point's bid began in early February. According to AP just being investigated often sounds a death knell for foreign investment - about half of companies pull out of their bids rather than face rejection.®