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Hart-Scott-Rodino Antitrust Improvements Act
Premerger Notification
Not all transactions are subject to pre-consummation review by the agencies. Only transactions of a certain size involving parties of a certain size may trigger the reporting requirements. We say "may" because there are many exemptions which could eliminate the need for parties that otherwise meet the thresholds to file premerger notification. Generally speaking, however, if your transaction meets the size-of-person and the size-of-transaction tests, you should consult your attorneys. The rules are extremely complicated, and failure to file where there was a duty to do so can carry a fine of up to $11,000 per day the parties are out of compliance.Generally (the actual rules are much more complicated), premerger notification is required if:
- either party to the proposed transaction has total annual net sales or total assets of at least $100 million and the other party has annual net sales or total assets of at least $10 million; and
- as a result of the impending merger, the acquiring party will hold more than $15 million of the acquired party's stock and/or assets. An acquisition of another party's voting securities of less than $15 million also require reporting if, as a result of the impending acquisition, the acquiring person will hold 50% or more of the voting securities of an issuer that has $25 million or more in annual net sales or total assets.
If the proposed transaction meets the HSR Act premerger notification thresholds, each party to the transaction must complete and file a Premerger Notification and Report Form. Additionally, the acquiring party must pay a $45,000 filing fee. Both parties to the transaction must file notification.
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