Notification requirements and procedures

General

The parties to a merger transaction must comply with the notification and waiting period provisions of the Clayton Act 1914 (the “Act”) prior to the acquiring person's assuming beneficial ownership of the assets or voting securities from the acquired person. Failure to fully comply with the Act and its regulations may subject any person, or officer, director, or partner of such person, to civil penalties of up to US $11,000, adjusted by a cost-of-living increase every 4 years, for each day of violation. Since its enactment, civil penalties in excess of US $5,000,000 have been obtained from individual non-complying persons.

Criteria for pre-merger notification.

The three threshold criteria are the following:

1. The acquiring or acquired person must be “engaged in commerce or in any activity affecting commerce” in the USA.

2. As a result of the transaction, the acquiring person would hold in excess of US $59.8 million of assets or voting securities.

3. For transactions valued at less than US 239.2 million, at least one person meets the US $12 million “size-of-person” test, and one meets the US $119.6 million “size-of-person” test, meaning, one person must have at least US $12 million of total assets (if engaged in manufacturing, the test is met with US $12 million in total assets or annual net sales), and the other has US $119.6 million of total assets (or net sales, if engaged in manufacturing). If the transaction is valued in excess of US $239.2 million, this size-of-person test does not apply.