US inspects takeover bids by Israeli, Dubai firms

US: The Bush administration, reeling from criticism over its handling of Dubai Ports World's attempt to take over the running of six US ports, has launched an investigation into takeover bids of firms with defence contracts by a second Dubai company and an Israeli firm.

The administration told Congress this week that the Committee on Foreign Investment in the United States is investigating the security implications of Dubai International Capital's $1.2 billion acquisition of the London-based Doncasters Group, which owns factories in Georgia and Connecticut that make precision components used in military aircraft and tanks.

The committee is also investigating a bid by Check Point Software Technologies, an Israeli firm, to buy Sourcefire, a Maryland software security firm which does business with the Pentagon.

Dubai Ports World last week agreed to a 45-day investigation into its US ports deal after Republicans and Democrats in Congress protested that the takeover could compromise security.

Out of 1,500 acquisitions referred to CFIUS, only one has been rejected, but Treasury Department spokesman Tony Fratto said yesterday that the investigation process is rigorous.

"The [ committee] process is charged with determining if there are national security concerns in any transaction, and it takes that role very seriously. It looks at each transaction on a case-by-case basis, and if security concerns are raised by any member of the committee at the end of an initial 30-day review, the case goes into investigation," he told the Washington Post.

Arab-American groups have complained that the outcry over Dubai Ports World reflects anti-Arab prejudice and is not justified by the company's record. But opinion polls show most Americans share legislators' concerns at the takeover of US port operations by a company controlled by the government of the United Arab Emirates.

Israeli company Check Point's proposed $225 million purchase of Sourcefire apparently raised concerns among security officials as soon as it was mooted. Check Point was founded by Gil Shwed, an Israeli billionaire who press reports say has served in the electronic intelligence division of the Israeli Defence Forces.

Sourcefire makes security software for customers that include the Department of Defence. It also has links with the National Security Agency.