Stay current on changes and developments in corporate law with a wide variety of resources and tools.
By Yin Wilczek
Companies involved in a merger or acquisition that raises national security issues should quickly hire experienced counsel to help them with possible review by the Committee on Foreign Investment in the U.S., Terex Corp. Vice President and Deputy General Counsel Scott Posner said.
Although in-house attorneys know their companies best, outside counsel familiar with CFIUS’s processes “can help you avoid some of the landmines,” Posner told Bloomberg Law. “And the earlier you engage them, the better off you’re going to be.”
CFIUS is an interagency panel headed by the Treasury Department that probes the acquisitions of U.S. businesses that pose national security risks. Companies voluntarily notify CFIUS of a transaction, but if they don’t do so, the committee can initiate its own review and impose changes. CFIUS is on track to scrutinize a record number of deals this year, and currently has a backlog of cases.
Several deals involving Chinese buyers have stalled—including Ant Financial’s bid for Dallas-based MoneyGram International Inc.—or been abandoned after encountering CFIUS objections. In September, President Donald Trump blocked the acquisition of Lattice Semiconductor Corp. by a Chinese-backed private equity fund based on the committee’s recommendation.
Posner’s responsibilities at Terex, a global manufacturer of cranes and other construction equipment based in Westport, Conn., include mergers and acquisitions. He spoke to Bloomberg Law Oct. 17 on the sidelines of the Association of Corporate Counsel’s annual meeting in Washington.
In 2016, CFIUS approved Finland-based Konecranes Plc’s proposal to buy Terex’s materials handling business.
Terex last year also was targeted in a $3.4 billion takeover attempt by Chinese company Zoomlion Heavy Industry Science and Technology Co. Concerns were raised that CFIUS would be a stumbling block because Terex has government contracts. Zoomlion ultimately dropped its bid because the parties couldn’t agree on crucial terms.
Posner added that in-house counsel should keep their boards and key stakeholders informed while dealing with CFIUS, especially if their transaction is one that may trigger deeper scrutiny. “You want to be thinking down the road.” Chinese acquirers or deals involving sensitive technology are obvious red flags, he said.
Bipartisan bills pending in Congress would extend CFIUS’s jurisdiction and lengthen its review timelines.
To contact the reporter on this story: Yin Wilczek in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Susan Jenkins at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)