Summary
GNC may have greater exposure to national security concerns liable to attract attention in a CFIUS review than would be expected for a supplements and vitamins retailer.
The company has more than 100 physical store locations on U.S. military bases.
The company has a significant trove of consumer personal information which may include a significant amount of data on U.S. military personnel.
A comprehensive CFIUS review would likely take these factors into consideration which may delay ultimate approval.
GNC’s (GNC) proposed preferred stock transaction (hereinafter referred to as the Harbin transaction) is presently undergoing regulatory review by the Committee on Foreign Investment in the United States (often referred to simply as CFIUS). CFIUS’s mandate, broadly speaking, is to review foreign investments in the United States for their impact on – and risks associated with – national security.
In prior commentaries, much has been made of the apparent lack of national security implications related to the manufacture and sale of supplements and vitamins to suggest there is a relatively low risk that the transaction will not receive regulatory approval. We agree with this assessment insofar as the manufacture and sale of supplements and vitamins itself is concerned, but this simplified narrative omits at least a couple factors which may prove relevant in assessing the risks associated with the CFIUS review.
