What is HSR in M&A?

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.

What is HSR clearance?

HSR Clearance means the expiration or termination of the applicable waiting period under the HSR Act (including any extended waiting period arising as a result of a request for additional information). HSR Clearance means the expiration or termination of the applicable waiting period under the HSR Act.

What is HSR size of person test?

The size-of-person test applies to transactions valued at less than $200 million (as adjusted, $368 million) and is based on the total assets and annual net sales of the ultimate parent entities (UPEs) of the acquiring and acquired persons.

What is HSR in finance?

The HSR Act provides that parties must not complete certain mergers, acquisitions or transfers of securities or assets, including grants of executive compensation, until they have made a detailed filing with the U.S. Federal Trade Commission and Department of Justice and waited for those agencies to determine that the …

What triggers HSR?

If the transaction is valued in excess of $50 million (as adjusted) but is $200 million (as adjusted) or less, the size of person test is met, and no exemption applies, an HSR filing must be made and the parties must wait until the statutory waiting period has expired before closing the deal.

Does HSR apply to private companies?

Under the current regulations, each private equity fund is usually its own “person” for HSR purposes. As a result, it will take more time and effort to prepare an HSR filing for a private equity fund, and some transactions will require an HSR filing that would not have required a filing under the current regulations.

Who needs to file HSR?

Regardless of the size of the parties, an HSR filing will be required if the size of the transaction is at least $368 million. These figures will be adjusted for changes in GDP again next year.

Who pays HSR fee?

Although the parties must submit HSR filings to both the FTC and the DOJ, only one filing fee is required per transaction. The Acquiring Person is responsible for ensuring the payment of the filing fee and usually pays the entire amount, but any arrangement between the parties is acceptable.

Does HSR apply to foreign companies?

Acquisitions of Foreign Assets: Effective April 17, 2002, pursuant to amended Section 802.50 of the Rules to the HSR Act, acquisitions of foreign assets will be exempt from notification requirements so long as sales in or into the U.S. generated by such assets did not exceed $50 million during the acquired person’s …

How long does HSR early termination take?

30 days
Under the HSR Act, companies of a certain size involved in a transaction exceeding reportability thresholds are required to file a pre-merger notification with the DOJ and FTC and observe a waiting period of 30 days, unless early termination of that 30-day waiting period is requested by the parties and granted by the …

What’s a filing fee?

Filing fee is a charge by a state or federal government agency for processing documents and requests. Filing fees help cover the cost of reviewing the documents, storing them, and discourage unnecessary paper filings.

Are HSR filings confidential?

The contents of the HSR submission, as well as the fact that the parties filed HSR forms at all, is kept confidential by the U.S. agencies.

How much money can be reported under the HSR Act?

Transactions valued at more than $376 million (previously $359.9 million) will be reportable regardless of the size of the parties, unless an HSR Act exemption applies.

What does fair market value mean in HSR?

Under the HSR rules, the value of an asset acquisition is Fair Market Value or, if determined and greater than Fair Market Value, the Acquisition Price.

What are the new filing fee thresholds for HSR?

The new thresholds do not affect the HSR Act filing fees, but the applicable filing fee will be based on the new thresholds, as follows: $45,000 for transactions valued at less than $188 million; $125,000 for transactions valued from $188 million to $940.1 million; and $280,000 for transactions valued at $940.1 million or more.

How does the HSR Act affect a merger?

It is important to keep in mind that a transaction will not escape antitrust scrutiny simply because the HSR Act’s filing thresholds are not satisfied or because the transaction receives HSR clearance to close. Indeed, the Antitrust Division and FTC each regularly file suits seeking to unwind previously consummated mergers.