HSR Exemptions Toolkit

This Toolkit includes resources that help identify transactions that are exempt from premerger notification under the HSR Act either in whole or in part. Some exemptions are specific to the type of acquisition, such as only to voting securities or asset acquisitions, while others are generally applicable to all types of transactions.

Practical Law Antitrust

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 ( www.practicallaw.com/4-382-3521) (HSR Act) requires that parties to certain transactions make premerger notification filings to the Federal Trade Commission ( www.practicallaw.com/1-382-3457) (FTC) and the Antitrust Division of the Department of Justice ( www.practicallaw.com/9-382-3397) (DOJ) before the transaction can close (see Practice Note, Determining Hart-Scott-Rodino Applicability: HSR Act Coverage ( www.practicallaw.com/9-516-9560) ). However, there are certain exemptions available to transacting parties under the HSR Act. Although some exemptions are specific to acquisitions of assets, voting securities, or non-corporate interests, some exemptions are generally applicable and should be considered in all transactions.

Exemptions can apply to an entire transaction or to a portion of a transaction either:

  • Making it not reportable under the HSR Act.

  • Lowering its value under the HSR Act and resulting in a lower HSR filing fee.

The HSR filing fee is graduated depending on the value of the transaction (see Practice Note, Hart-Scott-Rodino Act: Overview: Filing Requirements ( www.practicallaw.com/9-383-6234) ).

Transacting parties improperly relying on HSR Act exemptions may be the subject of antitrust enforcement actions and civil penalties of up to $40,654 per day (see 15 U.S.C. § 18a(g)(1) and 82 Fed. Reg. 8136 (Jan. 24, 2017)).

The exemption that has been most frequently the source of antitrust agency enforcement activity is the Rule 802.9 exemption, which covers acquisitions:

  • Made solely for the purpose of investment.

  • Where the acquiring party will hold 10% or less of the target's voting securities.

(16 C.F.R. § 802.9.)

This Toolkit is a collection of continuously maintained resources designed to guide counsel through the application of exemptions to a transaction that may be reportable under the HSR Act. This Toolkit also contains resources demonstrating the effects of improperly relying on an exemption, including on the Rule 802.9 exemption.

 

Practice Notes

 

Checklist

 
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