On June 28, the Federal Trade Commission (FTC) formalized new rules to codify its informal procedures for companies completing transactions that require US merger control filings pursuant to the Hart-Scott-Rodino Act (HSR). Most transactions involving assets, sales or shares valued at more than $70.9 million are subject to HSR which, in most instances, requires the parties to observe a 30-day waiting period before a transaction can be consummated. Consistent with its current procedures, parties may withdraw their premerger notification filing by notifying the FTC and the Antitrust Division in writing. Further, the FTC has traditionally allowed parties seeking to pursue an acquisition to withdraw a pending HSR filing and resubmit it within two business days in order to restart the waiting period without having to pay another filing fee.
Under the codified rules, if the parties wish to pursue the acquisition, new notifications and a new filing fee will be required, unless the filing occurs within two business days of the withdrawal. A new waiting period also must be observed prior to consummation of the acquisition. The procedure may only be used once and only under the following circumstances: (i) the proposed acquisition does not change in any material way; (ii) the resubmitted notification is recertified and relevant parts of the submission are updated; and (iii) the resubmitted notification is refiled within two business days of the withdrawal.
The most significant amendments relate to the creation of automatic withdrawals of HSR filings for an incomplete tender offer and a terminated definitive agreement, both of which require disclosure to the Securities and Exchange Commission. According to the FTC, when these circumstances occur, the transactions have become merely “hypothetical.” Accordingly, the new rules require that any associated HSR filings submitted with respect to these two types of transactions are automatically deemed to be withdrawn on the date of the SEC filing. The party submitting the SEC filing must notify the FTC and the US Department of Justice (DOJ) in writing when such filing is made. An HSR filing is not automatically withdrawn if the applicable HSR waiting period has expired or terminated, and the parties have not entered into a timing agreement with the FTC or DOJ to delay the closing.