On May 15, 2018, the FTC issued guidance clarifying that, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”), FTC reporting is required for certain mergers, acquisitions, or transfers of securities or assets, even where the parties do not exchange money. The FTC cited several examples of such transactions that require reporting, as follows: (1) exchanges of one type of interest in a company for another interest, for example, Corporation X's exchange of convertible notes of Corporation Y, for voting securities of Corporation Y; (2) transactions wherein consideration is made in the form of voting securities of the buyer; (3) consolidations of two companies resulting in shareholder acquisition of new shares from the merged entity; (4) reorganizations of legal entities resulting in shareholder acquisition of new interests in the reorganized entity; and (5) employee compensation in the form of voting securities of the employer company. The FTC warns that companies must incorporate these non-cash exchanges in their HRS compliance programs; otherwise, failure can result in substantial penalties. For more information, see https://www.ftc.gov/news-events/blogs/competition-matters/2018/05/you-dont-have-write-check-acquire-hsr-reportable.

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