If you’re planning a business merger, it’s essential to work with a business law firm near Wichita. Your business attorney can help you understand the review process conducted by the Federal Trade Commission (FTC) and the Department of Justice (DOJ). Merger reviews are mandated by the Hart-Scott-Rodino Act. They are intended to reduce the risk of allowing an anticompetitive merger to take place. Since the FTC and DOJ share jurisdiction in this area of business law, they are responsible for assigning a particular merger to one agency or the other.
Preliminary Review
Most proposed business mergers require only one review. After your business lawyer reports the proposed deal to the FTC and DOJ, the involved parties are required to wait 30 days for the review to conclude before completing the deal. In the event that the deal involves a bankruptcy transaction or cash tender, the parties must only wait 15 days. During that time, the agency will review the proposed deal to determine if it might violate antitrust laws. The reviewing agency may take one of several actions. It may simply let the waiting period expire, in which case you will be free to complete the deal. Or, the agency may opt for an early termination of the waiting period, in which case you are allowed to complete the deal before the end of the waiting period. Thirdly, if antitrust issues are involved, the agency may request additional information and take a closer look at the proposal.
Second Review
While most proposed business mergers are allowed to proceed after the preliminary review, a few are affected by a second request, or extended review. The business attorneys for all involved parties will provide the additional information requested by the reviewing agency. Once they have done so, the parties must wait another 30 days for the second review. If the deal appears satisfactory to the agencies, they will close the investigation and allow the proposed deal to go forward. Otherwise, the second review may lead to a settlement with the companies. Or, the agencies may use the federal courts or administrative processes to prevent the deal from moving forward.