February 19, 2009

Antitrust Clearance: Cutting through the Government Red Tape to Close the Deal

From Akin Gump: “The recent worldwide financial turmoil and the still-uncertain aftermath of the Emergency Economic Stabilization Act of 2008 have sparked major mergers and acquisitions that need very rapid antitrust regulatory approval in order to calm distressed markets and salvage shareholder value. More such M&A deals are surely coming. Despite the normal 30-day waiting period under the Hart-Scott-Rodino Act, deals can be done much more quickly under the right circumstances.

The HSR Act, Section 7A of the Clayton Act, 15 U.S.C. § 18a. is a “file and wait” statute. Parties to proposed transactions meeting certain size thresholds must file notification with both the FTC and the DOJ. They must also observe a mandatory waiting period prior to closing, generally 30 days – but 15 days in the case of a bankruptcy or cash tender offer. If a transaction raises substantive antitrust issues requiring thorough investigation, a so-called “Second Request” for information may be issued, typically causing the waiting period to be extended by many months.

Critically, however, the mandatory HSR waiting period can also be shortened through the discretionary grant of an “early termination.” § 7A(b)(2).” Learn more from this memo, and this one.