Merger review process continues for Sprint, T-Mobile deal after facing 3 rounds of Congressional Hearings

On March 12, 2019, executives of T-Mobile US Inc. (“T-Mobile”) and Sprint Corporation (“Sprint”) testified in the third round of Congressional Hearings concerning the merger of the two companies. T-Mobile’s purchase of Sprint for $26 billion was announced almost a year ago on April 29, 2018 and continues to endure questioning from regulators. (Victoria Graham, Bloomberg). The Federal Communications Commission (“FCC”) and the Democratic-controlled House Subcommittee on Antitrust are reviewing the merger under the Communications Act of 1934 to ensure it promotes “the public interest, convenience, and necessity.” (47 U.S.C. §310(d); Chairman Frank Pallone, Jr., Committee on Energy and Commerce). While the U.S. Department of Justice’s (“DOJ”) antitrust division does not consider U.S. industrial policy in merger reviews like the House Subcommittee, it is looking at whether the deal harms competition. (Todd Shields et al., Bloomberg). 

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Deutsche Bank’s Last Hope

Deutsche Bank’s merger with Commerzbank could make Deutsche Bank the fourth largest bank in Europe with the potential to make Germany instrumental in the international market.  With Deutsche Bank (“Deutsche”) getting support from key German government officials to proceed with negotiations to merge with Commerzbank, it seems likely a merger between the two will succeed. Although a merger between the banks is probable, the banks face a great amount of opposition, and logistical issues, which may hinder the merger and any future success Deutsche could enjoy. The acquisition serves as a strategy to improve Deutsche’s competitiveness by giving Deutsche the necessary size and resources to compete in the global market.

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Blackstone Enters Growing Japanese Private Equity Market with Agreement to Purchase AYUMI Pharmaceutical

The Blackstone Group (“Blackstone”), a New York-based financial services firm, announced on March 15, 2019, that it had signed a definitive agreement to purchase Japanese drug maker AYUMI Pharmaceutical Corporation (“AYUMI”). (Lisa Du, Bloomberg Law). This deal marks Blackstone’s first investment in a growing Japanese private equity market. (Matt Anderson et al., Blackstone). AYUMI produces drugs for rheumatic and orthopedic disorders and is valued at around $1 billion. The company is currently owned by Japanese private equity firms Unison Capital Inc. (“Unison”) and M3 Inc. (“M3”). (Lisa Du, Bloomberg Law).

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Government Dramatically Expands Oversight of Foreign Investment in U.S. Business

The Committee on Foreign Investment in the United States (“CFIUS”) is a multi-agency committee comprised of members from executive agencies related to the economy, national security, and foreign intelligence. The agency was created during Gerald Ford’s presidency and its mandate is to review any transaction (called “covered transactions”) that might have an impact on U.S. national security (Keeler, Mayer Brown).A covered transaction is a merger, acquisition, or takeover in which a foreign national, entity, or government acquires an interest in a U.S. business that has an impact on U.S. national security (Jaramillo, Foley Hoag).This system of review was designed to be voluntary. Even so, CFIUS maintains the ability to block transactions when no notice of filing is submitted through the CFIUS system.

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Crypto Industry Increases Lobbying Efforts in Washington

With Blockchain technology becoming more prevalent worldwide, particularly as it relates to cryptocurrencies and initial coin offerings (“ICOs”), regulators continue their struggle to develop appropriate legislation that embodies an ideal balance between regulation and innovation. In an effort to help shape these new regulations and encourage legislation that is favorable to the crypto industry, many crypto leaders have increased their presence in Washington, primarily through lobbying efforts. (Lydia Beyoud, Bloomberg Law). In fact, lobbying efforts increased significantly during 2018 with larger crypto groups spending six-figures per quarter on lobbying alone, and crypto-specific companies filing twice as many lobbying reports in 2018 as 2017. (Id.).

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As the Cryptocurrency Industry Grows, Will the Amount of Fraud and Lawsuits Grow with It?

Cryptocurrency and the technology it relies on, blockchain, revolutionized both the tech and finance world. A blockchain is a distributed record of transactions, usually managed by a peer-to-peer network of computers that validates the transactions. With companies racing to take advantage of this new industry, it was only a matter of time before some companies would try to take advantage of unsuspecting investors. This is what happened with a company called Compcoin LLC. (“Compcoin”).

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