baker & hostetler llp eu antitrust enforcement of us entities: the aftermath of ge-honeywell...
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Baker & Hostetler LLP
EU Antitrust Enforcement of US Entities:The Aftermath of GE-Honeywell
Part IIUS. Merger Clearance
byGregory J. Casas
1000 Louisiana Street, Suite 2000Houston, Texas 77002
713-646-1387 [email protected]
Baker Hostetler2 Counsel to Market Leaders
US Merger Clearance
• Hart Scott Rodino Antitrust Improvements Act (“HSR Filing”)– Two Part Test
• Size of the Party Test• Size of the Transaction Test
– Filing Fee– HSR Form & Attachments– 30 Day Waiting Period
Baker Hostetler3 Counsel to Market Leaders
US Merger Clearance
• Two Part Test– Size of the Party
• $11.3MM/113.4MM (for deals up to $226.8MM)
– Size of the Transaction Test• Greater than $56.7MM
• Filing Fee for transactions:– < $113.4MM = $45,000– Over $113.4MM to $567MM = $125,000– >$567MM = $280,000
Baker Hostetler4 Counsel to Market Leaders
US Merger Clearance
• HSR Form– 2002 NAICS Codes for revenue reporting– Internet links for Items 4(a) and 4(b)– Item 4(c) documents– Overlapping NAICS Codes
Baker Hostetler5 Counsel to Market Leaders
US Merger Clearance
• 30 Day Waiting Period– Early termination– Gun jumping
• No news isn’t necessarily good news– Clearance does not equal approval– Post closing investigations
Baker Hostetler6 Counsel to Market Leaders
US Merger Clearance
• Substantive test– Substantial Lessening of Competition
• What is the relevant market• Role of efficiencies• Hard economic evidence• What remedies solve any problems
Baker Hostetler7 Counsel to Market Leaders
US Merger Clearance
• Second Requests– Appeal available– Model Second Requests– Negotiate early and often– Compliance v. capitulation
Baker Hostetler8 Counsel to Market Leaders
US Merger Clearance
• Remedies– Won’t accept a remedy without an
investigation– Won’t accept a remedy unless agency would
have litigated for it– Does the remedy replace lost competition
Baker Hostetler9 Counsel to Market Leaders
US Merger Clearance
• Remedies Currently Used– Upfront buyers– Clean sweeps– Structural over behavioral– Crown jewels– Trustees– Litigated fixes– disgorgement
Baker Hostetler10 Counsel to Market Leaders
US Merger Clearance
• State Attorneys general– No one stop shop– Local focus– Increasing role– Integral part of merger clearance
Baker Hostetler11 Counsel to Market Leaders
GE-Honeywell
• Electronic controls and aircraft engines/finance
• Why the US cleared the deal– Efficiencies/synergies=lower costs– Bundled products=lower costs– Better products=lower costs– Vertical integration=better deals & lower costs
Baker Hostetler12 Counsel to Market Leaders
US/International Clearance
• Best Practices for Coordinating Merger Reviews– Enhanced cooperation early– Minimizes risk of divergence– Meeting with parties and officials– Cooperative investigations
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