2309004 Informal Interpretation

Date

September 19, 2023

Rule

803.10

Staff

Michelle Fetterman

Response/Comments

It is not permissible to have an effective date that predates the expiration of the HSR waiting period, even if the actual closing does not occur until after the expiration of the HSR waiting period.

Original Image - 2309004 Informal Interpretation (221.72 KB)

Question

From: Fetterman, Michelle <mfetterman@ftc.gov>
Sent: Tuesday, September 19, 2023 12:20:59 PM (UTC-05:00) Eastern Time (US & Canada)
To: HSRHelp <HSRHelp@ftc.gov> [Redacted]
Subject: RE: HSR Waiting Period Question

It is not permissible to have an effective date that predates the expiration of the HSR waiting period, even if the actual closing does not occur until after the expiration of the HSR waiting period.

From: [Redacted]
Sent: Monday, September 18, 2023 12:07:28 PM (UTC-05:00) Eastern Time (US & Canada)
To: HSRHelp <HSRHelp@ftc.gov>
Subject: HSR Waiting Period Question

I’m writing with a question regarding the Effective Date (defined below) of a transaction predating the Closing Date (defined below) of a transaction. For example, Company A is purchasing 100% of the equity of Company B. The parties each file the Premerger Notification Filing and the waiting period expires on November 1^st. The parties close the transaction on November 2^nd(the “Closing Date”). For accounting and payroll purposes and for the purposes of assuming certain liabilities, the transaction purchase agreement provides that the transaction will be effective as of 12:01 AM on November 1^st(the “Effective Date”) The parties take no steps to integrate the businesses prior to the Closing Date.

Based on the above, is it permissible to have an Effective Date that predates the actual Closing Date?

From: Fetterman, Miche ll e < m fette rman@ftc. gov>
Sent : Tuesday, Se ptember 19, 2023 12:20 :59 PM UTC-05: 00
She inberg, Samuel I.
From: 	HSR Help
Se nt: 	Tuesday, Sept ember 19, 2023 12:21 PM
To: 	Walsh, Ka thryn E. ; Be rg, Karen E. ; Musi ck, Vesse lina; Shaffer, Kristin; She inberg, Samuel I. ; Six, An ne;
Whi te head, Nora; Burton, June
S ubj ect : 	FW: HSR Waiting Period Question
From:
Sent : 	on ay, 	ep em 	r 	,
To: HSRHe lp < HSRHel p@ftc.g ov>;
Subject: RE: HSR Wa iting Pe riod
CONTROLLED
It is not perm iss ible to have an effect iv e date that predates the expi rat ion of the HSR w ait ing per iod , even if the actual
clo si ng does not occur unt il after the expi rat ion of the HSR w ait ing per iod.
(UTC-05:00) Easte rn n me ( US & Canada)
To: HSRHe lp < HSRHel p@ftc.g ov>
Subject: HSR Waiting Pe riod Question
I' m w rit ing w i th a quest ion regarding the Effective Date (defined belo w) of a t ransact i on predat ing the Clo si ng Date
(defi ned below ) of a tran saction. For example, Company A is purchasing 100 % of the equit y of Company B. The part ies
each fi le the Premerger Not i fi c at ion Filing and the w ait ing peri od expires on Nov embe r 1st, The part ies close the
transaction on Nov embe r 2nd (the "Clo si ng Date") . For acc ount ing and payroll purpo ses an d for the purposes of as sum ing
certain liabi li t ie s, the transaction purchase agreement provides that the tran saction wil l be effect iv e as of 12:01 AM on
Nov ember 1st (the " Effect iv e Date") The part ies take no steps to integrate the bu si ne ss es pr i or to the Closing Date.
Ba sed on the above, is it perm issi ble to have an Effect ive Date that predates the actual Closing Date?
Regards,
1

i
2

2309004 Informal Interpretation

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