A Republican lawmaker is putting together a bill that would require businesses subsidized by foreign governments to disclose that information when they pursue large mergers subject to U.S. regulatory review.
The bill, led by Rep. Scott Fitzgerald, R-Wisc., and tentatively named the “Stopping Foreign Government Subsidies for Mergers Act,” would require businesses backed by state-owned entities to notify regulators of that backing when they report a deal of more than $92 million in value.
That additional information can help regulators assess how a company might act once merged, Republican Federal Trade Commissioner Noah Joshua Phillips, who supports the legislation, said in an interview with CNBC.
“Our presumptions in the law and the way we do our work are based on the notion fundamentally that firms profit maximize. They seek to make money,” Phillips told the network. “But state-owned entities don’t necessarily have the pursuit of profit as their ultimate motive, and as a result, they may not act in the same way as the companies that we normally look at do.”