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A Look At The Raytheon – United Technologies Merger Through An FCPA Lens

unitedtechraytheon

A few days ago Raytheon Company and United Technologies Corporation announced entry “into an agreement to combine in an all-stock merger of equals.” The merger was unanimously approved by the Boards of Directors of both companies and is expected to close in the first half of 2020.

The aerospace and defense industries have significant points of contact with “foreign officials” in the global marketplace and thus a relatively high degree of FCPA risk. Indeed, United Technologies resolved an approximate $14 million FCPA enforcement action in 2018 regarding conduct in Russia, Azerbaijan, China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia.

This post examines the Foreign Corrupt Practices Act and related provisions of the merger agreement as well as a prior example of how FCPA issues scuttled a defense industry merger.

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Next Up – MTS Resolves $850 Million FCPA Enforcement Action

mts

First it was Netherlands-based VimpelCom which resolved a net $398 million FCPA enforcement action in February 2016 for bribing an alleged Uzbekistan telecom official (see here and here for prior posts).

Then it was Sweden-based Telia which resolved a net $483 million FCPA enforcement action in September 2017 based on the same alleged core conduct. (see here and here for prior posts).

Recently, the SEC and DOJ announced (see here and here) that Russia-based Mobile TeleSystems PJSC (MTS) agreed to resolve an $850 million DOJ/SEC FCPA enforcement action based on the same alleged core conduct. This is the largest settlement amount in an FCPA enforcement action in history. (See here for a list of the top ten corporate enforcement actions).

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DOJ’s Cronan On The “Importance Of Law Enforcement And Private Industry Working Together” (With Rebuttal Points)

workingtogether

Yesterday, DOJ Principal Deputy Assistant Attorney General John Cronan delivered this speech “about the importance of law enforcement and private industry working together in pursuit of common, shared objectives.”

Cronan’s speech touched upon a number of topics including the DOJ’s FCPA Corporate Enforcement Policy, so-called declinations, transparency in law enforcement, and merger and acquisition issues. This post excerpts the speech and provides various rebuttal points.

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Deputy Assistant Attorney General Matthew Miner On A Variety Of FCPA Issues (With Commentary)

miner

Yesterday, Deputy Assistant AG Matt Miner delivered this speech.

It touched upon a number of Foreign Corrupt Practices Act issues including: the DOJ’s Corporate Enforcement Policy, voluntary disclosure, so-called declinations, coordinated resolutions, general compliance issues, and M&A transactions.

This post summarizes the speech and provides certain commentary.

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Friday Roundup

Roundup

Scrutiny alerts and updates, charged, it needs to stop, and my answer. It’s all here in the Friday roundup.

Scrutiny Alerts and Updates

Plantronics/Polycom

In March 2018, Plantronics (an audio communications company) announced that it entered into a definitive agreement by which it would acquire Polycom in a cash and stock transaction valued at $2.0 billion. The transaction closed in early July and recently Plantronics disclosed:

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