Strengthening Post-Acquisition Compliance in M&A With Lessons from the Deere FCPA Case

Strengthening Post-Acquisition Compliance in M&A With Lessons from the Deere FCPA Case

An article by Tom Fox on the Compliance Podcast Network analyzes the Deere FCPA enforcement action and underscores the importance of post-acquisition compliance, particularly to prevent corruption risks and protect companies from costly violations.

Deere, a multinational company known for agricultural machinery, acquired the Wirtgen Group, which was involved in corrupt practices in Thailand. These illegal activities, involving bribery of foreign officials, continued post-acquisition and were undetected by Deere’s compliance team due to the delayed integration of compliance measures.

According to Fox, the key takeaway for compliance professionals is the critical need for immediate and thorough post-acquisition compliance integration. This includes rolling out the parent company’s compliance policies, conducting employee training, reviewing third-party relationships, and monitoring high-risk activities. Had Deere executed these measures promptly, they could have identified and curtailed the ongoing corruption sooner, avoiding FCPA penalties.

Post-acquisition investigations are equally crucial. Compliance teams should conduct forensic reviews of financial transactions, interview employees, and audit third-party relationships to uncover any lingering corrupt practices. Leveraging internal and external resources, such as audit teams and forensic specialists, can further accelerate the compliance integration process, especially in high-risk regions.

The article also notes that the Deere case emphasizes the importance of continuous monitoring and reassessment of compliance risks, particularly in high-corruption regions. Swift action on red flags—such as operations in high-risk areas and dealings with government officials—could have mitigated risks earlier in the process.

The Deere enforcement action serves as a reminder that post-acquisition compliance must be a priority from day one, with ongoing efforts to ensure alignment with FCPA standards, ultimately protecting the organization from costly violations.