Acquisitions » Mea Culpa Softens The FCPA Hit But Doesn’t Block It

Mea Culpa Softens The FCPA Hit But Doesn’t Block It

Store room full of new car tyres

March 9, 2015

It looked like a good move: The acquisition of two retail tire companies in Africa, one in Kenya and one in Angola, by Goodyear Tire & Rubber Co., although with $20 million each in annual revenues, these two businesses were hardly noticeable on the spread sheet of a company that had $20 billion in revenues the same year they were acquired. Things took a bad turn when Goodyear had to pay more than $16 million to settle SEC allegations that the acquired companies had paid bribes to both government and private companies to induce them to buy tires. That number could have been far higher, but the government took into account that Goodyear had apparently reported the infractions as soon as it discovered them, produced documents, fired some employees, and improved its compliance programs. A post form Alston & Bird looks at the case and finds a number of takeaways for companies that acquire foreign businesses. “Even the smallest subsidiaries can cause major problems for multinational companies,” they point out. “No new acquisition, no matter how small, should be overlooked from an FCPA compliance perspective.”


Read full article at:

Share this post: