Exemptions (Interpretations 97 - 166)

• Pages: 175-290

175

EXEMPTIONS

Exemptions 177

97 Applicable provisions. 7A(c), 801.21, 802 generally.

Issue. What are the HSR Act exemptions and when do they apply?

Analysis. Even if an acquisition satisfies the HSR threshold tests, it is

not reportable if it qualifies for one of the HSR exemptions. Both the

HSR Act and its implementing rules set forth a number of different

exemptions. The statutory exemptions are found in Section 7A(c) of the

HSR Act, and the regulatory exemptions are found in Part 802 of the

HSR Rules. In addition, Section 801.21 of the Rules deals with cash and

cash equivalent issues.

The exemptions may apply based on, among other factors, the

identity of the acquiring or acquired person, the type of assets to be

acquired or held by the acquired entity, or the manner in which the

acquisition is structured or occurs. Exemptions based on the identity of

the acquiring person include—but are not limited to—certain types of

institutional investors (Section 802.64), certain employee trusts

(Section 802.35), certain foreign governmental entities (Section 802.52),

certain government agencies (Section 7A(c)(4)), certain securities

underwriters (Section 802.60), and certain creditors and insurers

(Section 802.63). For each of these exemptions, the identity of the

acquiring person is only one factor among several that must be satisfied

for the exemption to apply, so a thorough examination of the potentially

applicable exemption is necessary.

Exemptions also apply based on the identity of the acquired entity.

For example, certain acquisitions of voting securities of a foreign issuer

are exempt from filing (Section 802.51). Transfers to or from certain

government agencies also are sometimes exempt (Section 7A(c)(4)).

Likewise, there are a number of exemptions based on the type of assets

to be acquired or held by the acquired entity including, among others,

acquisitions of certain goods and realty in the ordinary course of business

(Section 7A(c)(1), Section 802.1), specified realty (Sections 802.2,

802.3, and 802.5), foreign assets under certain circumstances

(Section 802.50), cash and cash equivalents (Section 801.21), and

acquisitions of convertible voting securities (Section 802.31). Again, it is

necessary to examine thoroughly the terms of any exemption before

relying on it since many are conditional on satisfaction of a number of

elements.

Exemptions based on the structure of the transaction include, inter

alia, intraperson transactions (Section 802.30); certain stock dividends