Bush approves Dubai takeover of defense plants

WASHINGTON (Reuters) -- President George W. Bush approved Dubai's $1.24 billion takeover of Doncasters, a British engineering company with U.S. plants that supply the Pentagon, the White House said on Friday.

The decision, announced by White House spokesman Scott McClellan, followed a congressional uproar over security fears that scuttled another Dubai state-owned company's plan to acquire operations at major U.S. ports.

The interagency Committee on Foreign Investments in the United States sent its confidential recommendation on the Dubai takeover of Doncasters to Bush on April 13.

"The president this morning accepted the committee's recommendation," McClellan said. "The committee recommended approval of the transaction after closely scrutinizing it and concluding that it would not compromise our national security."

President Bush said Friday morning that the deal "has been looked at very carefully, has been analyzed by a CFIUS committee. I signed off on it this morning because I'm convinced at the recommendation of the CFIUS committee as well as our military that it's a sale that should go through," when he asked about the deal during a White House news conference.

Bush's decision followed a congressional uproar over security fears that scuttled another Dubai state-owned company's plan to acquire operations at major U.S. ports.

The administration has attempted to head off that kind of criticism this time by consulting members of the U.S. Congress about the transaction, with Pentagon and Treasury officials having briefed members recently.

Still, there was likely to be some concern from lawmakers, and it was unclear whether the conditions Bush was expected to attach would quiet Democratic critics.

Among Doncasters' units is a plant in Georgia that is the sole supplier of turbine fan parts for U.S. Abrams battle tanks. The interagency Committee on Foreign Investments in the United States sent its confidential recommendation on the Dubai takeover of Doncasters to Bush on April 13.

Dubai Ports World opted last month to transfer terminal operations at the six U.S. ports in question to a U.S. entity after a bipartisan furor over security fears.