The Hart-Scott-Rodino Act requires notifications to be filed prior to the completion of a merger or acquisition when certain transaction size limits are met. The filing allows regulators at the Federal Trade Commission and the Department of Justice to analyze the anti-competitive effect of the deal.
1
Determine the size of the transaction
Ascertain the size of the transaction according to the HSR rules and determine whether it meets the reporting threshold. This determination is done differently depending on whether the transaction is a stock or asset deal. Typically, the size of the transaction determination is made by the lawyer assisting with the filing.
2
Determine the "ulimate parent entity" of each party
Again, using the HSR rules, the "ultimate parent entities" of the acquiring and acquired persons in the transaction must be determined. Typically, the determination of the ultimate parent entities of the parties is made by the lawyer assisting with the filing.
3
Determine whether the "size of the person" test is met
The size of the ultimate parent entities involved is another threshold determination that must be undertaken in accordance with the HSR rules. Typically, the size of the person determination is made by the lawyer assisting with the filing.
4
Determine whether exceptions apply
The HSR rules provide for a number of exceptions to the HSR notification filing requirements. The determination of which, if any, exceptions apply, is typically made by the lawyer assisting with the filing.
5
If notification is required, complete the notification form.
The notification form must be completed and filed with the FTC and DOJ. The form requires the parties to gather and report some detailed financial information. The form is typically completed by the lawyer assisting with the filing working closely with the company's CFO. In addition, the acquiring party must pay a filing fee that ranges from a low of $45,000 to a high of $280,000.
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