When is hsr filing required

At the end of the waiting period, the investigating agency can allow the transaction to close or file suit in court to block the transaction. At any point, the agency may negotiate a settlement with the parties to resolve their competitive concerns, such as requiring a divestiture of a line of business. The HSR Act applies to certain mergers, acquisitions of assets or equity, and joint ventures that exceed a minimum value and, in some cases, an additional threshold based on the size of each party.

The HSR Act thresholds are adjusted annually. Even if the thresholds are met, there are many exemptions to HSR reportability to consider as well. One party — including any subsidiary or division — must also be engaged in commerce in the US, or activity affecting US commerce.

A foreign party can meet this test if they engage in business or make sales in or into the US. Once both parties have filed, a specific merger review timeline begins. For most — but not all — transactions, this starts with an initial day waiting period. For cash tender offers and bankruptcies, the initial waiting period is only 15 days. During the initial HSR waiting period:. Companies are sometimes unaware that the HSR Act applies to their transaction and may close without first filing an HSR form and observing the initial waiting period.

This can lead to enforcement actions and civil penalties. The complexity of the HSR Act can often result in unintentional missteps.

However, a solid legal strategy, combined with practical legal know-how, can help avoid common violations, including:. Explore Practical Law from Thomson Reuters, your source for industry-leading information, news, and guidance. What is the Hart-Scott-Rodino Act? Which transactions require an HSR filing? The tests, and the current thresholds for each, are the: Size-of-transaction test. HSR filings are premerger notifications that parties to a proposed merger transaction make with both the Federal Trade Commission and the Department of Justice.

Subject to minor exceptions, both the seller and the buyer must each separately file with both agencies. Once the filing is made, a mandatory waiting period begins. Both the U. Because either agency may choose to review a merger, parties must submit HSR filings to both agencies.

For most filings, the mandatory initial waiting period is 30 days, beginning the day after the filings are received complete and ending at pm on the 30th day thereafter unless a federal holiday is on either date. Typically Second Requests are issued on the last day before the expiration of the initial waiting period. During the waiting period, an agency will review the filing. If the agency decides not to take further action, it will do nothing and, when the waiting period expires, the parties are free to consummate the transaction.

The agency may also grant an "early termination," discussed more below. Only one party to the transaction need request ET, but both agencies must grant the ET request for it to apply. ET may be requested in an HSR filing or made by separate request after filing. Because the agencies work on different timelines, one agency may grant long before the other.

And because the agencies are independent, one agency may grant ET but not the other. For these reasons, parties should not rely on the possibility of ET. Of course, every terminations do occur. Practices Antitrust Law. First Name. Last Name. Company Name. Send Message. Size of Transaction. Size of Person.