Blog Posts Tagged with Merger

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HSR threshold adjustments and reportability for 2020

When Congress passed the Hart-Scott-Rodino Antitrust Improvements Act of 1976, it created minimum dollar thresholds to limit the burden of premerger reporting. In 2000, it amended the HSR statute to require the annual adjustment of these thresholds based on the change in gross national product. As a result, reportability under the Act changes from year to year as the statutory thresholds adjust. The PNO fields many questions about the upcoming adjustments to the HSR thresholds from parties whose transactions may take place around the time of the revisions.

The closest competitor is not the only competitor

More and more, merging parties argue that their merger does not raise competition concerns because they are not each other’s closest competitors. Parties have advanced this argument even in markets where there will be only two or three remaining firms post-transaction, including the merged firm. This argument is not new, and it often misunderstands merger analysis.

Avoidance devices won’t avoid HSR penalties

The Commission and Department of Justice’s recent case against Canon Inc. and Toshiba Corporation for violating the Hart-Scott-Rodino Antitrust Improvements Act makes an important point: restructuring a deal to avoid or delay an HSR filing may subject the merging companies to substantial penalties if the restructured transaction still results in an acquisition by the A side.

Just because it’s ancillary doesn’t make it legal

In The Wizard of Oz, Dorothy was told to ignore the man behind the curtain. Some may argue that the same guidance applies to ancillary parts of a merger or joint venture agreement. These can include non-solicitation and non-compete provisions. Even when such provisions are ancillary to an otherwise legitimate business transaction, we will still make a determination that the restraints do not independently violate the antitrust laws by being overly broad.

Interlocking Mindfulness

The wellness strategy of the moment is mindfulness: focusing on the present and being completely aware of your situation. Even in the corporate sphere, there are good reasons for anyone in governance to take a self-assessment. Am I living in the now, what is my position in the world, am I currently violating the per se prohibition on interlocking directorates under Section 8 of the Clayton Act?

Unpacking Divestiture Packages

Crafting effective merger remedies is one of the Commission’s most important tasks. Done well, a divestiture prevents the competitive harm likely to result from a proposed merger and ensures that competition remains as robust as it was premerger.

HSR threshold adjustments and reportability for 2019

When Congress passed the Hart-Scott-Rodino Antitrust Improvements Act of 1976, it created minimum dollar thresholds to limit the burden of premerger reporting. In 2000, it amended the HSR statute to require the annual adjustment of these thresholds based on the change in gross national product. As a result, reportability under the Act changes from year to year as the statutory thresholds adjust. The PNO fields many questions about the upcoming adjustments to the HSR thresholds from parties whose transactions may take place around the time of the revisions.

Control no longer controlling for HSR reporting of not-for-profit combinations

The PNO routinely provides informal guidance on Hart-Scott-Rodino reporting obligations that arise when combining not-for-profit entities, typically in the context of hospital combinations. In the past, much of this guidance focused on whether the combination resulted in a change of "control" of the board of directors of one or more of the combining entities. This was because those seeking guidance described hospital combinations primarily in terms of formal board governance.

U.S. Privilege Following Akzo Nobel v. European Commission

Lawyers who have been paying attention to such things might recall the predicted fallout from the decision in Akzo Chemicals Ltd v. European Commission, Case C-550/07-P (September 14, 2010). In Akzo, the ECJ held that internal communications between in-house counsel and their companies’ employees are not privileged in European competition law cases.

It takes less time to do a thing right

Longfellow said “It takes less time to do a thing right than to explain why you did it wrong.” We agree, especially when it comes to designing effective merger remedies—ones that maintain competition at pre-merger levels so that the merger does not lead to higher prices, lower quality, or reduced innovation. From the perspective of the Bureau of Competition and the Commission, getting it right takes time.

You don’t have to write a check to acquire an HSR-reportable interest

If your HSR compliance program tracks only those acquisitions that require a payment, you may miss a variety of reportable acquisitions, leading to liability and fines for failures to file. In most situations, you have to file notification under the Hart-Scott-Rodino Act before you pay to purchase voting securities, assets, or certain non-corporate interests. As a result, many HSR compliance programs kick in when someone has to write a check. Below we flag some examples of situations in which you may need to file – a compliance program that won’t catch these isn’t doing its job.

Avoiding antitrust pitfalls during pre-merger negotiations and due diligence

Most antitrust practitioners are attuned to advising clients about the antitrust risk that a proposed acquisition may violate Section 7 of the Clayton Act. But counsel and clients must also be conscious of the risks of sharing information with a competitor before and during merger negotiations—a concern that remains until the merger closes.

HSR threshold adjustments and reportability for 2018

When Congress passed the Hart-Scott-Rodino Antitrust Improvements Act of 1976, it created minimum dollar thresholds to limit the burden of premerger reporting. In 2000, it amended the HSR statute to require the annual adjustment of these thresholds based on the change in gross national product. As a result, reportability under the Act changes from year to year as the statutory thresholds adjust. The PNO fields many questions about the upcoming adjustments to the HSR thresholds from parties whose transactions may take place around the time of the revisions.

Vertical mergers, yesterday and today

Last week, I spoke about a topic that has attracted a lot of popular interest in antitrust enforcement lately—vertical merger enforcement. We view vertical mergers as an important part of the FTC’s enforcement agenda. However, it is true that, relative to horizontal mergers, vertical mergers are a smaller part of the workload of the FTC and the DOJ’s Antitrust Division.

Have an HSR question? Help us answer you quickly

The staff of the Premerger Notification Office processes, reviews, and answers inquiries related to around two thousand transactions, involving roughly 4,000 HSR filings, each year. The number one priority of the PNO is to process incoming HSR filings in a timely fashion so Bureau of Competition and Antitrust Division litigation staff can review filings of interest and we can clear non-problematic transactions for closing as quickly as possible.

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