On August 1, a number of amendments to the Delaware General Corporation Law (DGCL) went into effect. Notably, several of the amendments modified sections of the DGCL pertaining to (1) two-step mergers effected under Section 251(h) of the DGCL, and (2) appraisal rights and proceedings.

Section 251(h) Mergers

DGCL Section 251(h) provides a mechanism for a buyer to effectuate the negotiated acquisition of a Delaware-domiciled publicly-traded corporation by a tender offer to purchase at least a majority of outstanding shares of the target, followed by a short-form merger to acquire any shares not tendered in such offer. This back-end merger does not require stockholder approval, thereby saving the buyer the time and expense involved in preparing and filing a proxy statement and holding a stockholders’ meeting if Delaware’s standard short-form merger threshold (90%) is not satisfied. The 2016 amendments to the DGCL clarified certain Section 251(h) requirements and increased the availability of such short-form mergers to potential buyers.
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On January 21, the Federal Trade Commission (FTC) announced the new filing thresholds that will apply to mergers and acquisitions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act). The changes will go into effect in late February, 30 days after they are published in the Federal Register. Under the revised notification thresholds, transactions valued above $78.2 million will require HSR notification when they meet the other requirements of the HSR Act. This is an increase from the current threshold of $76.3 million. The filing thresholds for larger transactions will be adjusted as well. The current $152.5 million threshold will be increased to $156.3 million, and the current $762.7 million threshold will be increased to $781.5 million.
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