Senators plan new bill on foreign takeover reviews

WASHINGTON, May 10 (Reuters) - Two senior U.S. senators said on Thursday they would introduce legislation to overhaul how the government reviews foreign takeovers of U.S. companies.

Banking Committee Chairman Chris Dodd and the panel’s top Republican said their bill would reform takeover reviews by the Committee on Foreign Investments in the United States (CFIUS).

The bill is meant to be a compromise between CFIUS reform passed by the Senate last year and a more business-friendly version passed by the House in February, one source said.

Connecticut Democrat Dodd and Alabama Republican Richard Shelby said the bill was set for a committee vote on Wednesday.

“The bill provides for a careful vetting of certain types of investments that may have national security implications. It does so in a systematic way, but through timely and clear procedures so as to not discourage investors,” Dodd said in a statement.

The announcement came on the same day Treasury Secretary Henry Paulson, at a conference in Washington, expressed concern that support for foreign investment is slipping and creating an impression foreigners are not welcome in the United States.

Paulson said the CFIUS review process is seen as unfriendly by some foreigners.

The Senate version of the CFIUS reform bill approved last year drew opposition from business groups because it would have required CFIUS to notify members of Congress of pending takeovers before making a recommendation on them.

CFIUS is an inter-agency panel led by the Treasury Secretary and includes senior officials from the departments of Commerce, Defense, Justice and State.

Reform legislation was introduced last year after CFIUS approved the acquisition of some key port operations in the United States by state-owned Dubai Ports World. Critics in Congress from both parties said CFIUS did not take enough time to consider the security implications.

Dubai Ports World later relinquished control over the U.S. port operations and sold them to American International Group Inc. AIG.N.