On Friday the Federal Trade Commission (“FTC”) codified its long-held policy of allowing the acquiring person in a transaction reported under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”) to restart the initial waiting period in order to permit the investigating antitrust agency to tie up any loose ends in the investigation without having to prepare and issue a Request for Additional Information and Documentary Material (“Second Request”) which, under the HSR Act, is the only way for the agency to halt the expiration of the HSR waiting period so that the parties do not close before the investigation is complete. The permissive withdrawal-refile rule, which makes no change to existing policy, allows the acquiring person to file a notice withdrawing the HSR and, before close of the second business day after, to file a new certification, affidavit, and update to Item 4, thus restarting the waiting period. The FTC’s announcement is available at http://www.ftc.gov/opa/2013/06/hsr.shtm.
This policy (now rule) has allowed many mergers and acquisitions to close on schedule and has allowed the investigating agency to buy precious extra days to complete interviews, review documents, or iron out any minor competitive issues with the parties, without having to issue a Second Request to do so. It has proven particularly helpful in those circumstances where the initial waiting period is 15 days and not 30, such as cash tender offers or asset acquisitions out of bankruptcy. Although the rule makes no change to existing policy, codification will allow companies and counsel a greater degree of certainty to rely on it as a tool for avoiding costly delays in the resolution of merger investigations.