Member Article

The Federal Trade Commission (FTC) finalized amendments to formally adopt a framework regarding the voluntary withdrawal of Hart Scott Rodino (HSR) premerger notification filings and submission without an additional filing fee to allow additional time for enforcement agency review of transactions during the initial HSR waiting period. Significantly, the proposed rules also establish that an HSR filing will be automatically withdrawn when certain filings by the parties are made with the Securities and Exchange Commission (SEC) announcing that a tender offer or agreement has been terminated. The final rules will not become effective until 30 days after publication in the Federal Register. A summary of the new rule regarding withdrawals in new §803.12 of the premerger notification rules follows: 

Voluntary Withdrawal 
Allows acquiring persons, and generally with some exceptions, acquired persons¹ to withdraw its respective notification filing by notifying the FTC and the Department of Justice, Antitrust Division in writing of such withdrawal. This procedure has been informally used by parties over the last 30 years to terminate pending (or avoid receiving) a costly “Second Request” or Request for Additional Information. This is often the case when the enforcement agencies have commenced an informal investigation during the initial waiting period but do not have enough time remaining to complete their review. The withdrawal and resubmission procedure allows the initial waiting period to start again without forcing the enforcement agencies into making a decision to issue a Second Request. A Second Request entails a much more extensive production of documents and information than the initial notification filing, as well as extending the waiting period, generally for an additional 30 days (or 10 days for cash tender offers) , that only commences after the substantial completion of those additional requests has occurred. 

Tender Offers and Material Agreement Terminations 
Upon (1) the expiration or termination of a tender offer and required amended Schedule TO disclosure filing with the SEC or (2) the termination of a material definitive agreement or letter of intent and required Form 8-K disclosure filing with the SEC, the HSR filing will automatically be withdrawn and deemed effective on the date of the applicable SEC filing. The parties are required to notify the FTC and the Antitrust Division in writing when the SEC filing is made. Any future reportable transaction between the parties would require a new HSR filing and filing fee unless re-submitted prior to the close of the second business day after withdrawal under the resubmission procedure. An automatic termination of the filing will not occur in certain instances including, if the initial waiting period has expired or been terminated early without issuance of either a Second Request or an agreed delayed closing or “timing agreement” with the FTC and the Antitrust Division. 

Resubmission Procedure 
Parties may resubmit one time a voluntarily or automatically withdrawn filing and thereby initiate a new waiting period for the same transaction without an additional filing fee if: (1) there are no material changes to the proposed acquisition; (2) the resubmitted notification filing is recertified by the filer and Items 4(a)-(d) of the notification filing are updated to the date of the resubmission; (2) a new executed affidavit accompanying the notification filing is provided and (4) the resubmission occurs prior to the close of the second business day after the withdrawal.²

For more information, please contact one of the attorneys listed below.