CAPITOL HILL INTEREST IN FOREIGN TAKEOVERS OF U.S. FIRMS
CAPITOL HILL INTEREST IN FOREIGN TAKEOVERS OF U.S. FIRMS has been rekindled by Roche's unfriendly bid for Sterling. Hearings on foreign investment in U.S. industry are expected to be held by the Senate Commerce Committee in March. In the House, preliminary groundwork is being done by both the Energy & Commerce and the Ways & Means Committees. During its recent defense against a takeover by Swiss-based Hoffmann-LaRoche, Sterling persuaded Reps. Madigan (R-III.) and Schulze (D-Pa.) to seek hearings before their House subcommittees on Roche's raid. Madigan, ranking Republican on the Commerce/Health Subcommittee, and Schulze, ranking minority member of the Ways & Means/Oversight Subcommittee, respectively asked Reps. Dingell (D-Mich.) and Rep. Pickle (D-Texas) to schedule oversight hearings on Roche's alleged use of Swiss secrecy laws in planning its hostile takeover attempt. Although Sterling ultimately found a white knight in Kodak ("The Pink Sheet" Jan. 25, p. 3), Hill staffers say concern remains about the competitive advantages foreign-based companies enjoy in takeover attempts. Reps. Pickle and Schulze are scheduled to meet on Feb. 2 to discuss future hearings. Schulze is said to be concerned with advantages various foreign countries present to companies based within their borders, including secrecy laws, subsidies through tax write-offs, and the interest of other countries in obtaining U.S. industry trade secrets and technology. In his letter to Dingell, Madigan said he was "concerned that in many cases laws of [foreign] countries prevent U.S. authorities from knowing who is really behind those takeover attempts." The issue involves "reciprocity of access to information and reciprocity of investment opportunities." Rep. Florio (D-N.J.) has held hearings in his Commerce Subcommittee on the issue of foreign investment and reportedly will consider additional hearings. Due to Commerce Subcommittee proposals, the currently pending Trade Act includes provisions authorizing the President to block foreign takeovers in the presence of national security concerns. Several representatives wrote to the Administration on behalf of Sterling. In the letters -- by Reps. Kaptur (D-Ohio) and Shays (R-Conn.) to the Federal Trade Commission, Rep. Dorgan (D-N.D) to the General Accounting Office, Reps. Green (R-N.Y.) and Roukema (R-N.J.) to the Securities & Exchange Commission, and Reps. Solomon (R-N.Y.) and LaFalce (D-N.Y.) to the Justice Department -- the agencies were asked to review the proposed takeover acquisition of Sterling by Roche. In addition, a group of 10 representatives on Jan. 21 asked President Reagan to order the Committee on Foreign Investment in the U.S. "to undertake an immediate investigation" of Roche's offer.
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