Governance in Brief – February 10, 2022

Posted on February 10, 2022

 

February 10, 2022 | Editor: Martin Wennerström

 

FTC seeks to block Lockheed’s purchase of Aerojet

Citing antitrust concerns, the U.S. Federal Trade Commission (“FTC”) has filed a suit seeking a preliminary injunction to block Lockheed Martin's USD 4.4 billion acquisition of rocket engine maker Aerojet Rocketdyne Holdings. The regulator argues that the merger would allow Lockheed “to harm rival defense contractors and further consolidate multiple markets critical to national security and defense,” specifically by raising the prices charged to the U.S. government while reducing quality and innovation. The deal was originally announced in December 2020 and had been expected to conclude in H2 2021, but was delayed pending the FTC’s antitrust review. The terms of the deal allow either party to terminate the transaction if it is not closed by March 21, 2022, and Lockheed had suggested that it could exercise this right in case the FTC were to take blocking action. Otherwise, the FTC’s complaint will be heard at an administrative trial scheduled for June 16, 2022.

Reuters | FTC | Lockheed Martin | CNBC |

 

AT&T spins off WarnerMedia in merger with Discovery

AT&T will spin off its interest in WarnerMedia to AT&T shareholders as part of the USD 43 billion merger of its media business with Discovery, Inc. AT&T shareholders will own 71% of the new Warner Bros Discovery firm, with each shareholder receiving 0.24 WBD shares for each AT&T share owned. Shareholders will also receive a dividend of USD 1.11 per share, down from USD 2.08 per share. The transaction is expected to reduce AT&T's debt load, while expanding its 5G, fibre, and streaming footprints.

 

Indian regulator mandates split of Chairman and CEO roles 

The Securities and Exchange Board of India (“SEBI”) will require that India’s top 500 listed companies split their chairman and managing director positions, that these two offices not be held by relatives, and that the chairmanship not be inhabited by an executive. The mandate was to have come into effect on April 1, 2020, but was deferred until April 1, 2022, as only 53% of the targeted entities had complied by the end of 2020. Indian law had previously allowed companies to combine the chairman and CEO position, provided that this was made explicit in the articles.

 

Hitachi appoints new CEO with IT background

Hitachi President Keiji Kojima will take over as CEO from Toshiaki Higashihara, effective April 1, 2022, with Higashihara staying on as Executive Chairman. The leadership change comes less than a year after Higashihara, who was appointed CEO in 2016, assumed the concurrent role of Chairman and was succeeded by Kojima as president. Kojima, who helped launch the “Lumada” business – Hitachi's key “internet of things” platform – in 2016, will lead the company’s strategy to strengthen its IT business and expands the Lumada platform globally.


 

Recent Content

governance in brief

Governance in Brief – January 26, 2023

Beijing takes golden shares in Alibaba units The Chinese government has acquired golden shares in two Alibaba subsidiaries, allowing it to exert veto power over major decisions while maintaining a relatively modest equity investment. A unit of state-backed Zhejiang Media Group first acquired such a minority stake in one Alibaba subsidiaries in September 2022, and an arm of the Cyberspace Administration of China (“CAC”) acquired a minority stake in another subsidiary in January 2023.

governance in brief

Governance in Brief – January 19, 2023

Beijing takes golden shares in Alibaba units The Chinese government has acquired golden shares in two Alibaba subsidiaries, allowing it to exert veto power over major decisions while maintaining a relatively modest equity investment. A unit of state-backed Zhejiang Media Group first acquired such a minority stake in one Alibaba subsidiaries in September 2022, and an arm of the Cyberspace Administration of China (“CAC”) acquired a minority stake in another subsidiary in January 2023.

governance in brief

Governance in Brief – January 12, 2023

Global investors pressure Glencore over coal production A group of investors with a combined USD 2.2 trillion in assets under management has submitted a shareholder proposal to the AGM of Glencore Plc, calling for improved disclosure on the commodity giant’s thermal coal operations and the alignment of these with the group’s public commitment to support the Paris Agreement’s goal of limiting global warming to 1.5 °C. The resolution constitutes a significant escalation of pressure on the mining company, which had already seen nearly a quarter of shareholders reject its climate progress report in April 2022.

governance in brief

Governance in Brief – January 5, 2023

U.S.-listed Chinese companies drop Hong Kong listing plans Several U.S.-listed Chinese companies, including Pinduoduo and Full Truck Alliance, have reportedly dropped plans to list their shares on the Hong Kong exchange. The decision came after the U.S. Public Company Accounting Oversight Board (“PCAOB”) announced that it had secured full access to investigate China-based audit firms, and that it had already reviewed eight audits conducted by Chinese KPMG and PwC affiliates. Chinese authorities had previously opposed any such disclosure, citing national security concerns.