A Federal Trade Commission (FTC) proposed rule seeks to clarify when a transaction is exempt from pre-merger notification under the Hart-Scott-Rodino Act because the entity involved is foreign. Tucker Ellis attorneys explain the change centers on the determination of an entity’s “principal offices,” decided by the primary location of its executives and assets.
The FTC, with the concurrence of the Department of Justice Antitrust Division, recently proposed changes to how US and foreign entities are defined for purposes of determining the reportability of transactions under the Hart-Scott-Rodino Antitrust Improvements Act.
The FTC proposed the changes to clarify when transactions involving minority shareholdings with one or more foreign parties are reportable. Yet it appears likely that the changes, if adopted, will raise at least as many questions as they answer for two transaction types:
- acquisitions of a foreign business with significant US operations; and
- acquisitions by foreign investment funds managed by US-based persons.
Full Content: Bloomberg
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