Premerger Reporting under the Hart-Scott-Rodino Act - A Basic Primer on Process and Reportability

(282 Ratings)

Produced on: June 24, 2014

Course Format On Demand Audio

Taught by

Categories:

Course Description

Time 61 minutes
Difficulty Intermediate

The purpose of the HSR Act is simple: it is intended to provide the federal antitrust authorities advance notice of large transactions so that they can investigate their competitive effects before closing.  But determining the application of the HSR Act is anything but straightforward. This session presented by Dechert LLP partners James Fishkin and Gorav Jindal describes the HSR review process, provides a primer on the jurisdictional requirements for reportability, and discusses best practices to maximize the odds of clearance during the initial waiting period.

 

Learning Objectives:

I.   Identify the HSR review process – Discussion of the key decision-points and events, and their impact on closing an HSR reportable transaction

II.  Recognize HSR reportability – Overview of the jurisdictional thresholds, valuation, key exemptions, and the impact of failing to file

III. Understand the importance of pre-deal document creation – Overview of Item 4 documents, the need for a clear procompetitive rationale, and the impact of “bad” documents on the review process

IV. Summarize the initial waiting period – Discussion of best practices during the initial waiting period, the “pull-and-refile” option, customer outreach, and responding to voluntary requests for information

 

Faculty

James Fishkin

Dechert LLP

James A. Fishkin combines both government and private sector experience within his practice, which focuses on mergers and acquisitions covering a wide range of industries, including supermarket chains and other retailers, consumer and food product manufacturers, internet-based firms, chemical and industrial gas firms, and healthcare firms. He has been a key participant in several of the most significant litigated antitrust cases in the last two decades that have set important precedents, including representing Whole Foods Market, Inc. in FTC v. Whole Foods Market, Inc. and the Federal Trade Commission in FTC v. Staples, Inc. and FTC v. H.J. Heinz Co. Mr. Fishkin has also played key roles in securing unconditional clearances for many high-profile mergers, including the merger of OfficeMax/Office Depot and Monster/HotJobs. He also served as the court-appointed Divestiture Trustee on behalf of the Department of Justice in the Grupo Bimbo/Sara Lee bread merger.  

 

Mr. Fishkin has been recognized by The Best Lawyers in America, Chambers USA, and The Legal 500 for his antitrust work. Benchmark Litigation has listed Mr. Fishkin as an antitrust “litigation star” and praised his “legal analysis, strategy, and knowledge of government entities.” 

 

Mr. Fishkin has been a speaker at industry and academic conferences, a lecturer to antitrust practitioners at CLE-approved events, and a guest law school lecturer. He has also made educational presentations to antitrust officials from the EU Merger Task Force, several European and South American countries, Japan, South Korea, Russia and the FTC. 

 

Significant Representations

  • Obtaining for OfficeMax unconditional clearance from the FTC and the Attorneys General of several states to merge with Office Depot after an eight month investigation. The FTC unanimously closed its investigation of the merger of second and third largest chains of office supply superstores on November 1, 2013 and issued a Statement of the Commission explaining its decision to clear the merger even though the FTC successfully blocked the merger of Staples and Office Depot in 1997.
  • Obtaining for Procurian, a company owned by Internet Capital Group, clearance from the DOJ to merge with Accenture. The DOJ cleared the transaction after a detailed review, despite competitive overlaps, without issuing a second request. ICG completed the sale to Accenture in December 2013.
  • Obtaining for MWI Veterinary Supply, Inc. clearance from the FTC to acquire the assets of IVESCO Holdings LLC. The FTC cleared the acquisition after a detailed review, despite competitive overlaps, without issuing a second request. MWI completed the acquisition in November 2013.
  • Obtaining for Airgas, Inc. clearance from the FTC to acquire the industrial, medical and specialty gas assets and operations of The Encompass Gas Group. The FTC cleared the acquisition after a detailed review, despite competitive overlaps, without issuing a second request. Airgas completed the acquisition in October 2013.
  • Serving as the Divestiture Trustee for United States v. Grupo Bimbo, S.A.B. de C.V., et al. (D.D.C.) from February 2012 to December 2013. The DOJ reached a settlement agreement with Grupo Bimbo S.A.B. de C.V., BBU, Inc., and the Sara Lee Corporation on October 21, 2011. The buyers, Grupo Bimbo and BBU, agreed to divest certain brands of sliced fresh bread and related assets to complete their acquisition of Sara Lee’s North American Fresh Bakery Business. After Grupo Bimbo and BBU failed to complete certain required divestitures in the time permitted, DOJ requested Judge Emmet G. Sullivan to appoint Mr. Fishkin as DOJ Divestiture Trustee based on his “expertise” and “experience.” The appointment by Judge Sullivan on February 29, 2012, vested Mr. Fishkin with the power and authority to divest certain of the parties’ commercial bakery brands and assets pursuant to the settlement agreement reached in the case. As the Divestiture Trustee, Mr. Fishkin sold the Sara Lee, EarthGrains, and Mrs. Baird’s brands in California, the Oklahoma City area, and the Kansas City Area to buyers that were all approved by the Department of Justice. Mr. Fishkin also negotiated co-pack agreements between the buyers and BBU.
  • Obtaining for The Harvard Drug Group, LLC, a portfolio company of private equity firm Court Square Capital Partners, clearance from the FTC to acquire the Rugby brand of over-the-counter (OTC) drug products from Watson Pharmaceuticals. The transaction combined Harvard’s Major brand of OTC drug products with Watson’s Rugby brand enabling Harvard to become one of the largest distributors of private label OTC drugs in the United States. After a thorough review, the FTC cleared the transaction without issuing a second request. Harvard completed the acquisition on October 29, 2012.
  • Obtaining for Infiltrator Systems, Inc., a portfolio company of private equity firm Graham Partners, clearance from the FTC to acquire the septic chamber business from Advance Drainage Systems, Inc. (ADS) and to enter into a long term distribution agreement with ADS for certain septic chamber products manufactured by Infiltrator. The FTC cleared the acquisition and long term distribution agreement, despite competitive overlaps, after a detailed review without issuing a second request. Infiltrator completed the acquisition on January 17, 2012.   
  • Securing FTC approval for DNA Diagnostics Center (DDC) to acquire Orchid Cellmark, Inc.’s government paternity testing business as part of a December 2011 FTC Consent Agreement. The FTC approved DDC as the upfront buyer in a Consent Agreement that enabled Laboratory Corporation of America to complete its US$85.4 million acquisition of Orchid Cellmark. DDC completed its acquisition of Orchid Cellmark’s government paternity testing business on December 19, 2011.
  • Obtaining clearance from the DOJ for One Equity Partner’s US$600 million sale of Prodigy Health Group, the nation’s largest independent third party administrator (TPA) of self-funded health care plans, to Aetna. The transaction received Early Termination in May 2011despite DOJ’s focus on health related antitrust issues. The transaction was completed June 28, 2011.
  • Obtaining for Dean Foods Company clearance from the DOJ to sell its branded and private label yogurt businesses in separate transactions. After a detailed review of each transaction by DOJ due to competitive overlaps, Dean Foods Company received Early Termination in January 2011 for the sale of its Mountain High yogurt brand to General Mills, Inc. and Early Termination in March 2011 for the sale of its private label yogurt business to Schreiber Foods, Inc.
  • Obtaining for Monster Worldwide, Inc. clearance from the FTC for its acquisition of HotJobs from Yahoo! Inc. The FTC closed its investigation in August 2010 after issuing second requests without seeking any enforcement action. A similar proposed acquisition of HotJobs by Monster, two of the largest online job boards, faced resistance from the FTC in 2001 before Yahoo! acquired HotJobs.
  • Representing Kellogg Company in its acquisition of Wholesome & Hearty Foods’ Gardenburger business. The FTC closed its investigation without seeking any enforcement action against the consummated acquisition in May 2009.
  • Securing timely FTC approval for Morton International, Inc., a wholly-owned subsidiary of Rohm and Haas Company, to acquire the Season-All® brand from McCormick & Co. as part of a July 2008 FTC Consent Agreement. The FTC approved Morton as the upfront buyer in a Consent Agreement that enabled McCormick to complete its US$605 million acquisition of the Lawry’s and Adolph’s brands from Unilever N.V. On July 31, 2008, Morton completed its acquisition of the Season-All® business.
  • Obtaining for Airgas, Inc. clearance from the FTC to acquire the refrigerants assets and operations of Refron, Inc. The FTC cleared the transaction, despite competitive overlaps, without issuing a second request. Airgas completed the acquisition in July 2008.
  • Acting as one of the lead trial lawyers to defend Whole Foods Market, Inc. in a lawsuit brought by the FTC  seeking to block the company’s US$565 million acquisition of Wild Oats Markets, Inc. Mr. Fishkin identified and deposed key third party witnesses, managed all aspects of third party discovery, and prepared and defended the defendants’ industry expert witness whose testimony and report were quoted throughout Judge Paul L. Friedman’s August 16, 2007 opinion rejecting the FTC’s motion for a preliminary injunction (FTC v. Whole Foods Market, Inc., 502 F. Supp. 2d 1 (D.D.C. 2007)). Mr. Fishkin also defended Whole Foods in the subsequent administrative litigation in 2008-09 to unwind the deal and he helped negotiate the consent agreement in 2009 with terms that were highly favorable to Whole Foods.
  • Formulating a transaction structure for Airgas, Inc. to obtain expedited FTC review and approval of its US$310 million acquisition of the industrial packaged gas business of Linde AG. The FTC cleared the transaction, despite competitive overlaps in numerous local areas, without issuing a second request. Airgas completed the acquisition in July 2007.
  • Securing approval from the FTC for Airgas, Inc. to acquire the U.S. industrial bulk gas business that Linde AG was ordered to divest after its acquisition of The BOC Group. Airgas completed the US$495 million acquisition in March 2007 after a detailed review of vertical and horizontal issues by the FTC.
  • Formulating a transaction structure for Clemens Markets, Inc. to sell its supermarkets to Giant Foods Stores, LLC, a subsidiary of Ahold USA, and C&S Wholesale Grocers, Inc. The FTC cleared the transactions, despite competitive overlaps, without initiating a second request investigation. Clemens completed the asset sales in October 2006.
  • Obtaining for Airgas, Inc. clearance from the FTC to acquire the industrial packaged gas assets and operations of Aeriform Corporation and Union Industrial Gas Group (UIG) in separate transactions. The FTC cleared each acquisition after separate reviews, despite competitive overlaps, without initiating a full investigation. Airgas completed the Aeriform acquisition in September 2006 and the UIG acquisition in November 2006.
  • Obtaining for Israel Chemical Ltd. (ICL) clearance in its US$255 million acquisition of assets and operations of Astaris LLC, a joint venture of FMC Corporation and Solutia Inc., despite competitive overlaps and prior FTC enforcement action in the relevant markets under review. ICL completed the acquisition in November 2005.
  • Representing Greenbacks, Inc. in the sale of its 96-store chain to Dollar Tree Stores, Inc. The FTC cleared the US$100 million sale, despite competitive overlaps, after a detailed review without initiating a second request investigation. The stock deal was completed in June 2003.

 

Government Experience 

 

Prior to entering private practice in 2002, Mr. Fishkin spent 15 years at the FTC where he had a distinguished career and acquired a deep understanding of complex antitrust and litigation issues. Mr. Fishkin was the lead attorney on many high profile merger investigations, including some of the most significant antitrust matters of the period. Such investigations resulted in successful litigation, major settlements or terminated mergers.

 

Mr. Fishkin played key roles in several of the FTC’s landmark merger trials, including FTC v. Staples, Inc., 970 F. Supp. 1066 (D.D.C. 1997) (preliminary injunction to prevent merger with Office Depot) and FTC v. H.J. Heinz Co., 116 F. Supp. 2d 190 (D.D.C. 2000), rev’d, 246 F.3d 708 (D.C. Cir. 2001) (reversing district court denial of preliminary injunction to prevent merger with Beech Nut). The Staples and Heinz decisions are frequently cited by judges and scholars in opinions, leading antitrust treatises, articles, and text books for determining when a merger may substantially lessen competition in violation of the Clayton Act. These cases are also discussed by antitrust officials for their impact on current merger law and enforcement practices. Mr. Fishkin’s collective litigation and trial responsibilities included direct and cross-examination of witnesses in federal court, depositions, discovery and formulating trial strategies.

 

Mr. Fishkin also was the prime architect of the Commission’s supermarket merger enforcement program and he managed virtually all of the major supermarket merger investigations. Some of his prominent supermarket merger enforcement matters included Winn-Dixie/Jitney-Jungle (2001), Kroger/Winn-Dixie (2000), Ahold/Pathmark (1999), Albertson’s/American Stores (1999), Ahold/Giant Food (1998), Albertson’s/Buttrey (1998), Jitney-Jungle/Delchamps (1997), Stop & Shop/Purity Supreme (1995) and Red Apple/Sloan’s-Gristede’s (1995).

 

Mr. Fishkin also managed or played a significant role in major investigations of mergers between food manufacturers, including General Mills/Pillsbury (2001), Heinz/Vlasic (2001) and KKR/RJR Nabisco (1989). Mr. Fishkin’s tenure with the Commission also included extensive work on mergers involving a variety of other industries, including nonfood retailers, cable networks, cable systems and chemical manufacturers. He was the principal draftsman of the staff recommendation memorandum outlining the various vertical and horizontal theories in Time Warner/Turner (1996). Mr. Fishkin’s experience also included consummated merger investigations, mergers before bankruptcy courts, investigations involving trade association anticompetitive practices and Hart-Scott-Rodino violation investigations which resulted in civil penalties.

 

Mr. Fishkin received numerous honors at the FTC, including the Distinguished Service award (2002), the Paul Rand Dixon award (2000), the Superior Service award (1996), and the Meritorious Service award (1995). Mr. Fishkin also received the Outstanding Team award (1997).

 

Education

  • The University of Iowa,
    • B.A., 1983, with distinction
    • Phi Beta Kappa 
  • The University of Iowa College of Law,
    • J.D., 1986,
    • Note and Comment Editor of the Iowa Law Review and author of “Nix v. Williams: An Analysis of the Preponderance Standard for the Inevitable Discovery Exception,” 70 Iowa Law Review 1369 (1985) (cited by an appellate court and discussed and cited in several law review articles and books)

    Court Admissions

    • United States District Court for the District of Columbia

    Bar Admissions/Qualifications

    • District of Columbia 
    • Nebraska

    Memberships

    • He is a member of the American Bar Association Antitrust Section. 

Gorav Jindal

Akin Gump Strauss Hauer & Feld LLP


Gorav Jindal is a skilled antitrust lawyer with superior knowledge of agency practice, procedure and personnel. He combines the quantitative analysis of a background in engineering and economics with the persuasive skills of a litigator and nationally ranked inter-collegiate debater. He guides clients past antitrust obstacles, providing innovative antitrust analyses to clients, whether in defense of a potential or consummated transaction or as a counselor on the full range of business practices.

Mr. Jindal’s practice combines government and private sector experience on behalf of clients in a variety of industries, including pharmaceuticals, energy, health care and life sciences, chemicals, technology, airlines, food and agriculture, construction, online recruiting, supermarkets, travel management, global distribution services and intellectual property. He handles all phases of merger investigations conducted by the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC). He has navigated clients through the antitrust aspects of transformative transactions and antitrust litigation, and was a key member of the team that won Global Competition Review’s antitrust “Matter of the Year” award in 2014.

Of particular focus in Mr. Jindal’s practice is the pharmaceutical industry. He has represented both large and small pharmaceutical companies under investigation by the FTC for price-fixing, improperly listing patents in the Orange Book, entering into illegal patent settlements and allegations of business practices designed to unfairly lengthen the lifecycle of branded drugs under the Hatch-Waxman Act.

Mr. Jindal also has experience handling antitrust litigation matters. He has assisted in the development of litigation strategy for preliminary injunction hearings and complex commercial litigation. He also represents clients that have been targeted in criminal antitrust proceedings, focusing on the plausibility of criminal theories and assessing the likelihood of indictments and convictions.

Prior to joining private practice, Mr. Jindal served in the FTC’s Bureau of Competition. There, he investigated a number of highly publicized transactions, including mergers in the publishing, computer hardware and chemical industries, and was responsible for interviewing and securing testimony, deposing witnesses, preparing expert testimony, assisting in drafting recommendations to the Bureau’s management and drafting settlements.


Representative Matters

Mr. Jindal has served as antitrust counsel to health care, energy, pharmaceutical, airline and supermarket chain clients, assisting them in a variety of strategic transactions and litigation, including high-profile mergers and acquisitions. Some of his recent representations include:

  • Representing a network airline carrier in its merger with another network airline carrier
  • Securing unconditional clearance for a leading fossil-fuel producer in the sale of certain assets to a nearby rival
  • Formulating the antitrust strategy to obtain international clearance in the hostile takeover of a large fossil-fuel producer by a leading global producer in the same industry
  • Securing unconditional clearance for a leading integrated pharmaceutical drug pharmacy in its acquisition of the largest specialized nationalized pharmacy in its segment
  • Representing a dialysis provider in a sale to a rival
  • Representing a diversified pharmaceutical company in the sale of its consumer health products division to a leading global competitor.
  • Representing a pharmaceutical company in a $1.9 billion acquisition
  • Representing a GDS service provider in a second-phase investigation conducted by the DOJ
  • Representing an online recruiting company in an acquisition transaction
  • Representing a supermarket chain against the FTC’s efforts to block its acquisition of another supermarket chain
  • Representing a domestic dairy processor in its $2.5 billion acquisition.

 

Education

University of Michigan, B.S., Industrial and Operations Engineering, B.A. in Economics, 1995 

The George Washington University Law School, J.D., 1998

 

Court Admissions

United States Court of Appeals for the Eleventh Circuit

 

Bar Admissions/Qualifications

New Jersey 

District of Columbia

Reviews

MG
Mark G.

great program

CC
Catherine A. C.

Great presentation of a very complex topic. THese gentlemen were very impressive!

CC
Christopher C.

This was an excellent presentation, in form and substance. I look forward more of this quality and complexity.

ED
Eliza D.

very good

DA
Don A.

Complex concepts explained with clarity.

JK
John K.

Worthwhile refresher/update info.

EG
Elizabeth G.

Excellent presentation -- took a complex topic and made it understandable - just the right level of detail and info on how to learn more.

MT
Mary T.

Very good presentation!

DA
David A.

Excellent

MG
Margaret G.

graphics of processes were particularly helpful as references

KC
Karen C.

Well presented

SC
Scott C.

Speakers effectively broke down a complicated topic

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$ 59 Business, Corporate, & Securities Law and Mergers & Acquisitions In Stock

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