Sterling Drug Inc. has launched a major offensive to get government help in warding off a hostile $4.4-billion takeover bid from Swiss pharmaceutical giant F. Hoffmann-La Roche & Co. and is using the specter of a wave of foreign acquisitions as ammunition.
Sterling is not the first takeover target to seek help from powerful allies, but its request for government intervention could be significant in a year that foreign takeovers of U.S. corporations are expected to surge.
“I think this takeover raises issues that should be considered by the Congress and the Administration, and I am asking that the takeover be stopped until there has been an opportunity to address those issues,” House Minority Whip Trent Lott (R-Miss.) wrote Atty. Gen. Edwin Meese III.
At Sterling’s request, a number of congressmen have asked Meese, Secretary of State George Shultz, Securities and Exchange Commission Chairman David S. Ruder and other top Administration officials to scrutinize the takeover or intervene on the company’s behalf.
The company claims lawmakers need to become aware of the advantages many foreign acquirers possess at a time that U.S. corporations are especially vulnerable.
U.S. corporations are deemed tempting targets because of the decline in the dollar, which increases the buying power of foreign buyers, and the crash of the stock market, which reduced shares of many U.S. companies to bargain prices.
Foreign buyers closed a record $39 billion in deals for U.S. companies in 1987, often in hostile acquisitions.
Congress is considering major takeover legislation as a result of the surge in acquisitions in recent years. A bill sponsored by Sen. William Proxmire (D-Wis.) was passed by the Senate Banking Committee and awaits consideration by the full Senate, while a House proposal is awaiting action in the House Energy and Commerce Committee.