DealLawyers.com Blog

Keith Bishop recently blogged about a new California statute that will require prospective buyers of the stock or assets of grocery or drug stores to provide advance notice to the California AG. This excerpt from the Legislative Counsel’s Digest’s summary of the legislation provides an overview of its requirements:

This bill would prohibit a person from acquiring any voting securities or assets of a retail grocery firm or retail drug firm, as those terms are defined, unless both parties give, or in the case of a tender offer, the acquiring party gives, specified notice to the Attorney General no less than 180 days before the acquisition is made effective.

The bill would require an acquiring party who is required to file notice pursuant to the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976 to submit the form and documentary material required to be submitted under that federal act, and would specify information to be included in the notice for a party who is not required to file notice pursuant to that federal act, including information required to assess the competitive effects of the proposed acquisition and to assess the economic and community impact of any planned divestiture or store closures.

The statute gives the AG 180 days to evaluate a particular transaction. In addition to the availability of injunctive relief and other equitable remedies, the legislation entitles the AG to recover to recover attorney’s fees and costs and impose civil penalties of up to $20,000 for each day of noncompliance with its requirements.

Keith’s blog notes that, among its other odd provisions, the statute on its face applies to all acquisitions of grocery store assets, without an exclusion for ordinary course retail transactions, and also doesn’t require any California nexus. The statute does give the AG the authority to adopt implementing regulations, so hopefully those will sort some of this out.

– John Jenkins