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Toshiba’s $5.4bn takeover of Westinghouse, the UK-owned nuclear company, has cleared a significant regulatory hurdle with the approval of the deal by the US committee that investigates foreign transactions on national security grounds.

People familiar with the transaction said it was given the green light from the secretive Committee on Foreign Investment in the US, or Cfius, last week.

Approval from Cfius was widely expected, but it represents an important milestone given the heightened political tension in Washington surrounding both the Cfius process and acquisitions by foreign companies of sensitive assets either owned by US groups or, in the case of Westinghouse, located in the US.

A political firestorm erupted in Congress this year after Cfius approved the takeover of five US port terminals and other facilities by a state-owned Dubai company. Lawmakers said the deal compromised US national security and attacked the executive branch agencies that comprise Cfius for failing adequately to investigate the transaction.

The backlash forced Dubai Ports World to agree to ring-fence the port terminals and sell them to a US buyer. It also prompted a flurry of legislative proposals to revamp the Cfius process.

Although the proposals have not yet been made law, attorneys and lobbyists who work on Cfius deals say the Dubai controversy has had a significant impact on the way deals are handled and expanded the range of transactions that are reviewed.

In one example last week, Emaar Properties, a Dubai real estate group, said it had applied for and received Cfius approval to acquire John Laing Homes, the second largest privately held homebuilder in the US.

The Toshiba deal was sealed at a difficult time for the companies involved, because of the Dubai situation, although the fact that Toshiba hails from Japan made the prospect of a rejection by Cfius unlikely.

The deal, agreed in February after a long auction process involving rivals General Electric and Shaw, must still receive additional regulatory and antitrust approvals before closing.

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