USA Law and Practice Contributed by: G. J. Ligelis Jr., Christopher K. Fargo, Alyssa K. Caples and Margaret T. Segall, Cravath, Swaine & Moore LLP
Securities Exchange Act of 1934 The Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”) regulate the trading of securities once the securities have been registered. Under the Exchange Act, public companies must comply with ongoing reporting requirements (eg, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K), produce financial state - ments in accordance with US GAAP and provide proxy statements in advance of votes at shareholder meetings. In addition to the regular cadence of periodic report - ing, US public companies must also disclose informa - tion relating to specific transactions or other actions within four days for certain reportable events on Form 8-K. A more lenient regime applies to “foreign private issuers” that are organised outside the USA and meet certain share ownership or business contacts criteria. 5.3 Investment Funds See 7. Foreign Investment/National Security for additional detail on FDI by foreign investors structured as investment funds. 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview The merger control regime in the USA is governed by the HSR Act and codified in Section 7 (a) of the Clayton Act. The DOJ and the FTC are both respon - sible for reviewing transactions and which agency has jurisdiction over a particular transaction is determined by agency experience and expertise with the relevant industry. The HSR Act requires that the transacting parties each file a pre-merger notification form (ie, a HSR filing) for transactions above a certain size. The parties must file if the following jurisdictional tests are met: size-of- transaction; size-of-person; and commerce. For 2025, the size-of-transaction test is met if the val - ue of the assets, voting securities and non-corporate interests to be acquired is more than USD126.4 mil -
lion. If the value is less than USD126.4 million, the transaction is not reportable. The size-of-person test only applies to transactions that result in the acquirer holding interests of the target company valued at more than USD126.4 million but less than USD505.8 mil - lion. This test is satisfied when one of the parties has annual net sales and total assets of at least USD252.9 million and the other has annual net sales and total assets of at least USD25.3 million. The thresholds for the size-of-transaction and size-of-person tests are adjusted each year. The commerce test is satisfied when the acquirer or the target company engages in commerce in the USA or in activities that impact US commerce. The HSR Act exempts the acquisition of voting secu - rities of a foreign issuer by a foreign acquirer unless certain separate thresholds are met. The HSR Act also has other exemptions, including voting securi - ties acquisitions that are only made for the purpose of investment. These acquisitions must be less than 10% of the voting securities and the investor must have “no intention of participating in the formulation, determination, or direction of the basic business deci - sions of the issuer”. After the parties make their HSR filings with the agen - cies, they enter an initial 30-day waiting period (15 days in the event of a cash tender offer or bankruptcy sale). Either party may request early termination of this waiting period, although the agencies have sus - pended the granting of early terminations since early 2021. If the agencies do not take any further action, the parties are free to close the transaction upon expi - ration of the waiting period. Changes to the HSR filing form went into effect in February 2025. These changes materially increase the time and effort needed to prepare HSR filings. In Feb - ruary 2025, the FTC also lifted the suspension of the granting of early terminations that has been in place since 2021. If the reviewing agency believes a more in-depth review is necessary, it may issue a request for addi - tional information and documentary material (second request) to each party. If the parties receive sec - ond requests, the waiting period is extended to 30
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