Mergers and acquisitions attorneys are likely familiar with the Hart-Scott-Rodino Act, and soon they may have to learn about a state accompaniment.
Democratic Sen. Marc Snyder and Rep. Cecelia Espenoza are the prime sponsors behind the Uniform Antitrust Pre-Merger Notification Act, which, if passed, would require a state-side filing of documentation for HSR transactions if a company involved in an HSR filing is either based in Colorado or if its direct or indirect annual net sales in the state are 20% or more of the filing threshold.
At the bill’s Senate Judiciary Committee hearing, Snyder said that the bill came to the General Assembly by way of the Uniform Law Commission.
“What this bill principally does is make sure that contemporaneously, whenever there is one of those [HSR] filings at the federal level, they’re also filed with state’s [attorney general], so that they can have timely access to those materials and see whether it presents any antitrust issues in their state and under their state codes,” Snyder said. “It improves the efficiency of state review process for all parties.”
“Under the current law, the only way state [attorneys general] can get a lot of this information is through litigation and subpoenas, causing unnecessary costs and delays for all parties,” Snyder added. “This will improve the attorney general’s ability to investigate potential mergers while reducing unnecessary costs and, importantly, enhances business certainty.”
Snyder also noted that the bill provided a strong confidential protection to businesses. He explained that the bill would prohibit Colorado’s Attorney General from sharing the information with nearly any group, subject to a few exceptions. “They can’t even acknowledge that they’ve received it,” Snyder said.
Those exceptions are the relevant federal agencies and to other attorneys general in states that have passed the uniform act or a substantially similar one. Espenoza noted that right now that only includes Washington.
Jefferey Riester, the director of legislative affairs for the Colorado Attorney General’s Office, appeared at the Senate hearing to say that the AG was neutral on the bill, but that their position was not a statement on the value the measure would add to the department.
“This bill will ensure that our office is able to appropriately review any notices that are sent, not only to the feds, but to our office as well, and make sure that if there are any problems that could lead to competition concerns or in balancing competitive behaviors, we want to make sure that we have that information and can provide any feedback as soon as possible to prevent those harms as quickly as we can,” Riester said.
Mike Blank, the director of state legislative affairs at CTIA – The Wireless Association, said at the bill’s hearing in the House of Representatives that his organization was in opposition to the bill. He said that states already have a process to obtain documents from federal reviewing agencies for HSR transactions.
“Merger information filed at federal agencies is heavily guarded, highly confidential and competitively sensitive,” Blank said. “Forcing businesses to file with multiple states when no additional review is needed is unnecessary.”
He also criticized the ability of state attorneys general to share the confidential information with each other, and said that the bill would force a company to incur unnecessary costs and that it would raise administrative burdens.
The bill passed its House hearing on April 28, and legislators on the House side will need to pass the measure within the next 10 days if it is to be sent to Gov. Jared Polis’s desk before the end of this year’s legislative session.