USA LAW AND PRACTICE Contributed by: George Casey, Heiko Schiwek, Elena Rubinov, Pierre-Emmanuel Perais, Clara Pang and Gregory Gewirtz, Linklaters LLP
9.2 Data Privacy Legal and contractual limitations can restrict the due diligence information that a technology company in the USA can provide. Prior to releas- ing due diligence information, a company should review which federal, state and international data privacy laws are applicable to its business operations. Specifically, regulations such as the EU General Data Protection Regulation (GDPR), the UK General Data Protection Regulation and US state privacy laws (eg, the California Con- sumer Privacy Act of 2018) may limit a compa- ny’s ability to share particular personal data (ie, information related to an identifiable individual) with a potential counterparty or their advisers. Additionally, the company must align with its pub- licly stated privacy policies and any agreements with third parties that include privacy-related stipulations. The USA lacks a comprehensive legislative privacy framework. Nevertheless, the US government has applied Section 5 of the Federal Trade Commission Act – which prohib- its unfair or deceptive acts or practices – against companies that fail to protect personal data or adhere to their published privacy policies. All these points need thorough consideration before sharing any personally identifiable information, such as client data or employee details (includ- ing social security or bank account numbers), during due diligence.
often filed on the day of (or shortly following) the announcement of the bid for the target. For a merger, generally the parties will jointly announce the transaction when the defini- tive merger agreement has been entered into between the target and the acquiror. A publicly traded target company must disclose the mate- rial terms of the transaction, in a filing made with the SEC, within four business days of entry into the definitive transaction documents. See 6.13 Securities Regulator’s or Stock Exchange Process . 10.2 Prospectus Requirements The offer and sale of securities to the target shareholders as consideration for the acqui- sition will need to be registered under the US Securities Act of 1933 (Securities Act), unless an exemption applies. A registration statement would include (among other information): • risk factors; • business descriptions; • financial statements; • management’s discussion and analysis of financial conditions; and • transaction-specific information that would be required in a proxy statement or a Schedule TO, as applicable. In addition, the staff of the SEC must approve (or “declare effective”) the registration statement, and typically makes many comments before granting such approval. Before the acquiror’s shares may be traded on a US national securities exchange, the acquiror must complete a listing application with the relevant exchange, unless the acquiror’s shares are already listed on the relevant exchange.
10. Disclosure 10.1 Making a Bid Public
For a tender offer, the SEC rules require that the acquiror file a Schedule TO (including an offer to purchase and related documents, such as a let- ter of transmittal). If the deal is only for cash con- sideration, the Schedule TO is relatively straight- forward and, assuming advance preparation, is
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