Your company has just made its largest acquisition ever and your CEO says they want you to have a compliance post-acquisition integration plan on their desk in one week. Where do you begin? A good place to start would be the 2012 FCPA Guidance language: Pre-acquisition due diligence, however, is normally only a portion of the compliance process for mergers and acquisitions. DOJ and SEC evaluate whether the acquiring company promptly incorporated the acquired company into all of its internal controls, including its compliance program. Companies should consider training new employees, reevaluating third parties under company standards, and, where appropriate, conducting audits on new business units.
As reported by New and Trahanas, in a July 2018 speech, former Deputy Assistant Attorney General Matthew Miner emphasized that DOJ would apply the principles contained in the FCPA Corporate Enforcement Policy to successor companies that discover potential violations subsequent to an acquisition, as well as to acquirers who detect potential corrupt activities during the due diligence process. He also encouraged acquiring companies to seek guidance through the FCPA Opinion Procedures. Miner said the DOJ would apply the principles contained in the FCPA Corporate Enforcement Policy to acquiring companies that uncover potential FCPA violations in the mergers and acquisitions context. This means if you meet the four requirements under the FCPA Corporate Enforcement Policy, the default DOJ position would be a declination would be granted
Three key takeaways:
- Planning is critical in the post-acquisition phase.
- Build upon what you learned in pre-acquisition due diligence.
- You literally need to be ready to hit the ground running when a transaction closes.