USA LAW AND PRACTICE Contributed by: George Casey, Heiko Schiwek, Elena Rubinov, Kristina Trauger, Pierre-Emmanuel Perais, Clara Pang, Gregory Gewirtz and Vinita Sithapathy, Linklaters
ing on the relevant state. If a US publicly traded entity is involved in the transaction, stock exchange rules may also be applicable. US federal antitrust laws are primarily enforced by the Antitrust Division of the DOJ and by the FTC. US foreign investment controls are implemented by the various agencies discussed in 2.6 National Security Review as well as other federal agencies responsible for sectoral controls. Depending on the industries (eg, energy) and jurisdic - tions in which the target and acquirer operate, other filings and approvals from state and federal regulatory authorities may be required. 2.3 Restrictions on Foreign Investments There are several sectors (eg, airlines, shipping between US ports and broadcast communications) in which the US government restricts foreign owner - ship or attaches special regulatory requirements for foreign owners. In some cases, a distinction may be made between foreign ownership by private sector and government entities. Waivers or licences allowing foreign owners to exceed standard limits are some - times available. There are also transactions in which foreign ownership is not limited but is subject to regu - latory requirements. The US government also has four separate national security-based processes for regu - lating inbound foreign investment and a programme for regulating certain outbound foreign investments. See 2.6 National Security Review for more details. 2.4 Antitrust Regulations In the United States, the main antitrust regulations applicable to business combinations are (each as amended): • the Clayton Antitrust Act (the “Clayton Act”), which includes the Hart-Scott-Rodino Antitrust Improve - ments Act of 1976 (the “HSR Act”); • the Sherman Antitrust Act (the “Sherman Act”); and • the Federal Trade Commission Act (the “FTC Act”). The HSR Act prescribes a pre-merger notification pro - cedure for certain business combinations, while the Sherman and FTC Acts prohibit certain anti-compet -
itive conduct; the Clayton Act prohibits anti-compet - itive transactions, among other things. The HSR Act requires that the parties to proposed stock or asset transactions file pre-merger notifica - tion notifications with the FTC and DOJ and observe a waiting period (usually 30 calendar days; 15 calen - dar days for cash tender offers and transactions in bankruptcy) if the transaction exceeds certain thresh - olds. This initial waiting period allows federal antitrust authorities to investigate the transaction prior to its consummation on the basis of the filing. If the govern - ment declines to take enforcement action concern - ing the acquisition, the parties may close from a US antitrust perspective within one year once the waiting period expires. Otherwise, the government may act before the initial period expires by issuing a “Second Request”, although the acquirer may choose to “pull and refile” its notification to effectively grant the gov - ernment an additional 30 or 15 days, as the case may be, to review the transaction without issuing a Second Request. A Second Request will extend the waiting period and requires the parties to submit a wide range of docu - ments and answer numerous interrogatories. After the parties have substantially complied with these requests, a second 30-calendar day (or ten-calendar day for cash tender offers and transactions in bank - ruptcy) waiting period begins. There is a one-year deadline within which to substantially comply with the Second Request, and parties receiving a Sec - ond Request cannot close before the second waiting period expires. The antitrust agencies typically seek a timing agreement with the parties that obligates the parties to provide several weeks’ notice of substantial compliance and closing. If the government still has substantive concerns about the transaction at the end of this period and has not reached agreement with the parties on an appropri - ate remedy, it can seek to enjoin the closing of the transaction in federal district court. In the absence of an injunction, parties may close the deal, subject to any applicable timing agreement.
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