The following summaries are industry segmented examples of CFIUS-reviewed transactions. Please refer to the 5/23/11 post for more information on this survey.
General Aviation Equipment
On December 11, 2010, Teledyne Technologies Incorporated agreed to sell its wholly-owned subsidiaries, Teledyne Continental Motors, Inc., and Teledyne Mattituck Services, Inc., to Technify Motor (USA) Ltd., a subsidiary of AVIC International Holding Corporation, a Chinese limited liability company. Continental Motors is a leading manufacturer of FAA-certified piston engines and is based in Mobile, Alabama. Mattituck is an aftermarket supplier and over hauler of piston engines to the general aviation marketplace. Teledyne Technologies provides sophisticated instrumentation, digital imaging products and software, aerospace and defense electronics and engineered systems.
On April 19, 2011 Teledyne announced that it had completed the divestiture. Although the parties released no specific information regarding their CFIUS filing, the closing was expressly subject to CFIUS review. The time period from announcement to completion of the transaction was, at most, 129 days, which suggests that the CFIUS review was completed within that time period.
Baldor Electric Company, based in Fort Smith, Arkansas, designs, manufactures and markets energy efficient industrial motors and adjustable speed drives. ABB is a global leader in power and automation technologies and is based in Zurich, Switzerland. On November 29, 2010 Baldor and ABB Ltd. announced that ABB would acquire Baldor in a friendly tender offer and merger.
The transaction agreement specified that clearance by CFIUS was a condition precedent to the completion of the transaction. In its filed response to ABB’s tender offer, Baldor stated, “Although [Baldor] does not believe that the [o]ffer and the [m]erger raise any national security concerns, [ABB] intends to make a filing with CFIUS on December 8, 2010.” The transcript of a conference call with media and analysts held on November 30 filed with the SEC provides insight into the process used to determine whether to make the filing with CFIUS. An analyst asks, “I understand that you don’t believe the CFIUS review will be a problem, as you only have about 15 million of revenues from military contracts?” An ABB executive replies tellingly, “Look, we did the CFIUS filing to be on the safe side. We will do that. We don’t expect any problems coming out of this process.”
The transaction was completed on January 27, 2011. The parties made their CFIUS filing on December 8, 2010 and received clearance 35 days later on January 12, 2011.
The following post will address transactions in the natural gas industry.