Antitrust Law Daily Wrap Up, ANTITRUST NEWS: HRS rules amended to address withdrawals of filings, (Jun 28, 2013)

By Jeffrey May, J.D.

The FTC has amended the Hart Scott Rodino (HSR) premerger notification rules to formalize a long-standing practice permitting merging parties to withdraw and refile an HSR filing without paying an additional fee. The practice is utilized by parties hoping to avoid a costly second request. Parties sometimes withdraw and refile to provide the antitrust agencies—facing the expiration of the 30-day waiting period under the HSR Act—with additional time to review the transaction.

The amendments add a new Rule 803.12. Rule 803.12(c) formalizes the withdrawal and refile process. Under new Rule 803.12(a), a party may withdraw its premerger notification filing by notifying the agencies.

The amendments also add a new paragraph to Rule 803.9, which covers filing fees. The new paragraph “(f)” states that parties utilizing the withdrawal and refile process of Rule 803.12(c) “shall pay no additional filing fee.”

New Rule 803.12(b) also establishes a procedure for the automatic withdrawal of an HSR filing when filings are made with the U.S. Securities and Exchange Commission (SEC) announcing that a transaction has been terminated. The automatic withdrawal procedure is triggered by either the filing of a Schedule TO-A with the SEC announcing the expiration or termination of a tender offer, or the filing of a Form 8-K announcing the termination of a definitive agreement.

According to the agencies, it is very unlikely that a transaction for which the HSR filing is automatically withdrawn during the merger review process (due to the parties’ SEC filing indicating that the transaction has been terminated) would be subsequently restarted.

If a filing is automatically withdrawn due to an SEC filing, parties can resubmit within a two-day period with no additional fee. If, however, a filing is automatically withdrawn due to an SEC filing and the parties do not utilize the two-day resubmission process but later decide to move forward with the transaction, then a new filing and filing fee would be required.

The new rule aligns the treatment of abandoned transactions by the FTC and the Department of Justice with the requirements of the SEC regarding public announcements of the termination of a transaction, according to the agency.

The agencies contend that Rule 803.12(b) is intended to help the FTC and Department of Justice “make efficient use of scarce agency resources” reviewing hypothetical deals.

The amendments will become effective 30 days after publication in the Federal Register.

Dissent. Commissioner Joshua D. Wright issued a dissenting statement. “In the absence of evidence that the automatic withdrawal rule would remedy a problem that exists under the current HSR regime, and thus benefit the public, I believe we should refrain from creating new regulations,” Wright said.

News: Antitrust FederalTradeCommissionNews