Effective February 25, 2016, the thresholds for the Hart-Scott-Rodino Antitrust Improvements (HSR) Act will be raised by about 2.5%, increasing the level that a transaction's value must top to initiate a filing to $78.2 million. This also adjusts the other key dollar thresholds of the Act. In addition to these changes, recent developments regarding the interpretation of the “investment-only” exemption by the Department of Justice and the Federal Trade Commission, including the Department of Justice’s suit against Value Act Capital, are significant developments for investors and companies making investments in other issuers. The Department of Justice’s suit against Value Act Capital, brought in April of this year, is a significant development with respect to the treatment of the “investment-only” exemption and, depending on its outcome, could have a significant impact on the interpretation of the exemption and its effect on the industry. In a two-hour LIVE Webcast, a panel of thought leaders and practitioners assembled by The Knowledge Group will discuss various significant HSR developments, including the new thresholds, the Value Act case, and other important developments, and will provide insights on their implications. Key topics include: The Revised 2016 Hart-Scott-Rodino Antitrust Thresholds Changes and Developments under the HSR Act The Department of Justice Lawsuit Against Value Act Capital Implications to the Industry To view the webcast go to this link: https://youtu.be/suun4c1nZPs To learn more about the webcast please visit our website: http://theknowledgegroup.org

1. Speaker Firms and Organization:
Ropes & Gray LLP
Adam Eckart
Senior Associate
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Presented By:
August 18, 2016
1
Partner Firms:
Mayer Brown LLP
Scott P. Perlman
Partner
Analysis Group, Inc.
Aaron Yeater
Managing Principal
Polsinelli PC
Matthew C. Hans
Shareholder

2. August 18, 2016
2
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3. August 18, 2016
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4
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5. August 18, 2016
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6. Partner Firms:
August 18, 2016
6
Ropes & Gray LLP is a leading global law firm with offices in New York,
Washington, D.C., Boston, Chicago, San Francisco, Silicon Valley, London,
Hong Kong, Shanghai, Tokyo, and Seoul. Built on a foundation of 150 years
of forging strong client relationships, Ropes & Gray has over 1,200 lawyers
and professionals representing interests across a broad spectrum of
industries in corporate law and litigation matters, as well as counseling on
labor and employment issues, tax and benefits, creditors’ rights, and private
client services. The firm’s clients include leading industrial companies,
financial institutions, government agencies, hospitals and health care
organizations, colleges and universities, as well as families and individuals.
Mayer Brown is a leading global law firm with offices in major cities across the
Americas, Asia and Europe. Our presence in the world’s leading markets
enables us to offer clients access to local market knowledge combined with
global reach.
Companies seeking consistently well-informed and insightful antitrust and
competition counseling around the world turn to Mayer Brown. Our firm has
more than 70 lawyers practicing antitrust and competition law who are
dedicated to delivering the highest quality service in meeting clients’ needs.
Our group includes former high-ranking US Justice Department officials, a
former US state attorney general, and many highly-regarded members of the
US and European antitrust bar. We fully understand today’s complex
competition issues, as well as the increasingly complex relationships among
corporations in a global economy. As a leader in US and EU competition law,
we offer up-to-the minute guidance concerning mergers, cartel investigations,
distribution and IP licensing issues, alleged abusive conduct by dominant
firms and state aid, which includes counsel at the federal and state levels in
the US, and for both member states and the EU in Europe. Adding to our
global capabilities, our antitrust lawyers in Hong Kong and China are skilled
at navigating the range of competition and other laws impacting trading and
licensing arrangements in the region, and offer clients the benefit of extensive
China antitrust filing experience and strong relationships with key competition
agencies.

7. August 18, 2016
7
…
Since 1981, Analysis Group has provided expertise in economics, finance,
health care analytics, and strategy to top law firms, Fortune 500 companies,
global health care corporations, and government agencies. Our work is
grounded in a collaborative approach that allows us to effectively integrate
the best ideas from leading academic and industry experts with our more
than 600 professionals. As a result, our clients receive thoughtful, pragmatic
solutions to their most challenging business and litigation problems. Through
our work in thousands of cases across multiple industries, we have become
one of the largest economics consulting firms in North America, with 11
offices in the United States, Canada, and China.
Partner Firms:
Polsinelli is an Am Law 100 firm with more than 800 attorneys in 19 offices,
serving corporations, institutions, and entrepreneurs nationally. Polsinelli has
the largest health care practice in the country and is ranked in the top five
percent of law firms for client service. Polsinelli attorneys provide practical
legal counsel infused with business insight, and focus on health care,
financial services, real estate, intellectual property, corporate, and business
litigation. Polsinelli attorneys have depth of experience in 100 service areas
and 70 industries.

8. Brief Speaker Bios:
Scott P. Perlman
Scott Perlman, a Partner in Mayer Brown’s Washington, D.C. office, concentrates his practice on mergers and
acquisitions and other transactional work, as well as on antitrust litigation and counseling. Scott has worked in the area of
Hart-Scott-Rodino compliance and merger review for the past 27 years and has primary responsibility for the entire firm
for counseling clients on HSR compliance issues. He has worked on a variety of mergers involving the health care
industry, including health insurance and hospital mergers, and the pharmaceutical, software, petrochemical, and oil and
gas industries, among others. Scott frequently counsels clients on antitrust compliance issues, and he has assisted
numerous clients with preparation of compliance materials as well as organizing compliance programs for their
employees.
August 18, 2016
8
Adam Eckart
Adam Eckart practices in Ropes & Gray’s antitrust practice group and has experience counseling domestic and
multinational business entities in a range of antitrust matters, with a particular focus on merger control issues. Adam
advises on merger control obligations under the Hart-Scott-Rodino Antitrust Improvements Act and foreign merger control
regimes for clients in a range of industries, including private equity funds, mutual funds and investment advisors,
technology companies, pharmaceutical companies, healthcare companies, and public and private operating companies,
among others. Adam has worked on hundreds of HSR filings during his tenure at the firm in addition to regularly
coordinating foreign merger control clearances around the world.

9. Brief Speaker Bios:
Matthew C. Hans
Matthew Hans uses his broad experience in antitrust law to help clients avoid problems in numerous competition issues including
mergers, joint ventures, restraints of trade, exclusive dealer relationships, and other collaborations among competitors. Matthew also
guides clients through the Hart-Scott-Rodino notification process and represents clients during Federal Trade Commission and
Department of Justice investigations.
August 18, 2016
9
Aaron Yeater
Aaron Yeater, Managing Principal; M.B.A., strategy and international finance, Yale School of Management; B.A., College
of Social Studies, Wesleyan University
Mr. Yeater specializes in the application of financial and economic analyses to complex business litigations, with a
particular focus on antitrust litigations. He has also evaluated the competitive effects of mergers and acquisitions in
industries including chemicals, oil and gas, technology and telecommunications.
► For more information about the speakers, you can visit: https://theknowledgegroup.org/event-homepage/?event_id=1992

10. Effective February 25, 2016, the thresholds for the Hart-Scott-Rodino Antitrust Improvements (HSR) Act will be raised by about
2.5%, increasing the level that a transaction's value must top to initiate a filing to $78.2 million. This also adjusts the other key
dollar thresholds of the Act. In addition to these changes, recent developments regarding the interpretation of the “investment-
only” exemption by the Department of Justice and the Federal Trade Commission, including the Department of Justice’s suit
against Value Act Capital, are significant developments for investors and companies making investments in other issuers.
The Department of Justice’s suit against Value Act Capital, brought in April of this year, is a significant development with respect
to the treatment of the “investment-only” exemption and, depending on its outcome, could have a significant impact on the
interpretation of the exemption and its effect on the industry.
In a two-hour LIVE Webcast, a panel of thought leaders and practitioners assembled by The Knowledge Group will discuss
various significant HSR developments, including the new thresholds, the Value Act case, and other important developments, and
will provide insights on their implications.
Key topics include:
• The Revised 2016 Hart-Scott-Rodino Antitrust Thresholds
• Changes and Developments under the HSR Act
• The Department of Justice Lawsuit Against Value Act Capital
• Implications to the Industry
August 18, 2016
10

11. Featured Speakers:
August 18, 2016
11
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

12. Introduction
Scott Perlman, a Partner in Mayer Brown’s Washington, D.C. office, concentrates his practice on
mergers and acquisitions and other transactional work, as well as on antitrust litigation and
counseling. Scott has worked in the area of Hart-Scott-Rodino compliance and merger review for
the past 27 years and has primary responsibility for the entire firm for counseling clients on HSR
compliance issues. He has worked on a variety of mergers involving the health care industry,
including health insurance and hospital mergers, and the pharmaceutical, software, petrochemical,
and oil and gas industries, among others. Scott frequently counsels clients on antitrust compliance
issues, and he has assisted numerous clients with preparation of compliance materials as well as
organizing compliance programs for their employees.
He also has advised on joint ventures in the health care, agriculture, transportation, and
entertainment industries, and has counseled business-to-business exchanges in the healthcare,
chemicals, metals, and retail industries. Scott has extensive experience in antitrust litigation,
including class actions, involving alleged price fixing, exclusive dealing and bundling claims,
predatory pricing, and government investigations of pricing and marketing policies. Scott also
frequently writes and speaks on antitrust issues, including HSR.
August 18, 2016
12
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP

13. Overview
August 18, 2016
13
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP
•Narrow Reading of the Investment-Only Exemption (15 U.S.C. §18a(c)(9) and Rule 801.1(i)(1))
•Institutional Investor Exemption – Exceptions (Rule 802.64)
•Narrowing of Real Property Exemptions Applied to Energy Transactions (July 2015)
•Classifying Foreign Entities – Corporate or Non-Corporate (May 2016)
•Potential Changes to the REIT Exemption

14. Investment-Only Exemption
August 18, 2016
14
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP
•Rule 801.1(i)(1): Solely for the purpose of investment. Voting securities are held or acquired “solely for the purpose of
investment” if the person holding or acquiring such voting securities has no intention of participating in the formulation,
determination, or direction of the basic business decisions of the issuer.
•Rule 802.9 Acquisition solely for the purpose of investment: An acquisition of voting securities shall be exempt from the
requirements of the act pursuant to section 7A(c)(9) if made solely for the purpose of investment and if, as a result of the
acquisition, the acquiring person would hold ten percent or less of the outstanding voting securities of the issuer, regardless of the
dollar value of voting securities so acquired or held.
•Within the last 12 months the FTC and DOJ have narrowed the availability of the investment-only exemption.
•In August 2015 Third Point settled with the FTC for improper reliance on the investment-only exemption and failure to file an HSR
for a 2011 transaction.
•As of August 1, 2016, parties incorrectly relying on the exemption, even in good faith, risk being fined up to $40,000 per day
(previously $16,000) for each day of noncompliance.
•As a first time offender Third Point was not fined, but agreed not to participate in certain actions if it is relying on the investment-
only exemption.

15. Investment-Only Exemption
August 18, 2016
15
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP
• Specific Investment Intent – FTC has identified conduct it believes indicates an activist intent to influence management and the
basic business decisions of the company (See https://www.ftc.gov/news-events/blogs/competition-matters/2015/08/investment-
only-means-just):
• Holding a board seat or nominating a candidate for the board of directors;
• Proposing corporate action that requires shareholding approval;
• Soliciting proxies;
• Being an officer of the issuer;
• Being a competitor of the issuer.

16. Investment-Only Exemption
August 18, 2016
16
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP
• In July 2016 ValueAct Capital settled with the DOJ for improper reliance on the investment-only exemption and failure to file an
HSR related to purchases of Halliburton and Baker Hughes stock.
•ValueAct Capital was fined $11 million. The largest fine ever for a company accused of violating the reporting and waiting period
requirements of the HSR Act.
•DOJ characterized ValueAct as an activist investor that looked to influence the management of Halliburton and Baker Hughes.

17. Institutional Investor Exemption
August 18, 2016
17
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP
•Rule 802.64: Institutional Investor Exemption applies to a:
•bank or savings bank;
•Savings and loan or building and loan company or association;
•Trust company;
•Insurance company;
•Investment company registered with the SEC under the Investment Company Act;
•Finance company;
•Broker-dealer;
•Small Business Investment Company or Minority Enterprise Small Business Investment Company;
•A stock bonus, pension, or profit-sharing trust;
•Bank holding company;
•An entity which is controlled directly or indirectly by an institutional investor and the activities of which are in the ordinary
course of business of the institutional investor;
•An entity which solely holds controlling interests in institutional investors;
•A nonprofit entity.
•Acquisitions of voting securities are exempt if:
•Made directly by an institutional investor;
•Made in the ordinary course of business;
•Made solely for the purpose of investment; and
•As a result of the acquisition the acquiring person would hold 15% or less of the outstanding voting securities of the issuer.
•Exceptions to the exemptions

18. Institutional Investor Exemption
August 18, 2016
18
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP
• In September 2015 Leucadia National Corporation settled with the FTC for improper reliance on the institutional investor
exemption related to a 2013 consolidation.
• Leucadia’s subsidiary and the issuer qualified as broker-dealers, making the exemption unavailable under an exception to the
exemption.
• Under the institutional investor exemption, certain institutional investors, including banks, investment companies and
broker-dealers, may not need to file a notification if the acquisition is made directly by the institutional investor in the
ordinary course of business solely for the purposes of investment and results in the investor holding 15 percent or less
of the outstanding voting securities of the issuer.
• However, a buyer may not use the exemption where:
• It is acquiring voting securities of an institutional investor of the same type as any entity controlled by the
buyer (e.g., a broker-dealer acquiring a broker-dealer); or
• A buyer-controlled entity, which is not also an institutional investor, already holds voting securities of the
issuer.
• In September 2014 Leucadia made a corrective HSR filing acknowledging that the acquisition was reportable under the HSR
Act.
• Although Leucadia relied on the advice of experienced HSR counsel, Leucadia was fined $240,000 because Leucadia was not
a first time offender.

19. Other Developments
•Narrowing of Exemptions Real Property Exemptions Applied to Energy Transactions (July 2015)
• Rule 802.5 investment rental property exemption - if the buyer proposes to acquire natural gas pipelines that it will use to
provide midstream transportation services to third parties, the transaction is not exempt under Rule 802.5.
• Rule 802.2(h) warehouse exemption is NOT available for oil/gas storage facilities.
August 18, 2016
19
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP

20. Other Developments
•Classifying Foreign Entities – Corporate or Non-Corporate (May 2016)
• FTC PNO issued an important clarification regarding how the agency will determine whether a foreign entity is classified as
corporate or non-corporate for the purpose of the agency’s premerger notification program. Press release, Corporate or
Non-Corporate? A New Approach to Classifying Foreign Entities under HSR Rules, Federal Trade Commission (May 19,
2016), available at https://www.ftc.gov/news-events/blogs/competition-matters/2016/05/corporate-or-non-corporate-new-
approach-classifying?utm_source=govdelivery.
• The FTC will now only classify as corporate an entity that issues securities allowing the holders to vote for the election of a
supervisory board of directors. If the entity does not issue such securities, the agency will not inquire as to the existence of
a management group, the groups’ composition, etc.
•Potential Changes to the REIT Exemption
• In a January ABA webinar, an official from the PNO signaled that a REIT holding an operating company is “perhaps not in
the ordinary course” and that the PNO is currently reexamining the scope of the REIT exemption.
August 18, 2016
20
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP

21. Introduction
Adam Eckart practices in Ropes & Gray’s antitrust practice group and has experience
counseling domestic and multinational business entities in a range of antitrust matters, with a
particular focus on merger control issues. Adam advises on merger control obligations under
the Hart-Scott-Rodino Antitrust Improvements Act and foreign merger control regimes for
clients in a range of industries, including private equity funds, mutual funds and investment
advisors, technology companies, pharmaceutical companies, healthcare companies, and
public and private operating companies, among others. Adam has worked on hundreds of
HSR filings during his tenure at the firm in addition to regularly coordinating foreign merger
control clearances around the world.
August 18, 2016
21
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

22. Overview
• Increased HSR thresholds
• Reportability and overview of thresholds
• Update to civil penalties
– Recent updates
– Recent enforcement action activity
August 18, 2016
22
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

23. New HSR Thresholds
Transactions closing on or after February 25, 2016 are subject to the following revised
thresholds:
• Size-of-Transaction Test: The $50 million (as adjusted) threshold increased from $76.3
million to $78.2 million
• Size-of-Persons Test: Applicable for transactions valued at $200 million (as adjusted) or
below – increased from $305.1 million to $312.6 million
– The $10 million (as adjusted) sales and assets threshold increased from $15.3 million to$15.6 million
– The $100 million (as adjusted) threshold increased from $152.5 million to $156.3 million
August 18, 2016
23
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

24. HSR Filing Fees
The filing fees were not revised under the annual threshold changes, but the filing thresholds
triggering each fee was revised as follows:
August 18, 2016
24
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP
Value of Transaction Filing Fee
In excess of $78.2 million but less than $156.3 million
(previously $76.3 million but less than $152.5 million)
$45,000
$156.3 million or greater but less than $781.5 million
(previously $152.5 million or greater but less than $762.7 million)
$125,000
$781.5 million or more
(previously $762.7 million or more)
$280,000

25. HSR Thresholds
• Absent exemption, transactions are reportable under the Hart-Scott-Rodino Act of 1976 if
the following tests are satisfied:
– Size of Transaction threshold
• As a result of the transaction, the acquiring person will hold greater than $78.2 million of
voting securities, assets and/or non-corporate interests of the acquired person.
– Size of Parties threshold
• For transactions valued below $312.6 million, generally speaking, one party must have net
sales or total world-wide assets of at least $156.3 million and the other party must have net
sales or world-wide total assets of at least $15.6 million.
– Commerce test (almost always met)
August 18, 2016
25
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

26. Do you meet the “size of transaction”?
• Basic threshold: the acquirer will hold voting securities, non-corporate interests or assets
valued in excess of $78.2 million as a result of the transaction
– “Voting securities” have the present right to vote for directors
– “Non-corporate interests” include interests in LLCs, partnerships, business trusts
– Threshold requires aggregation of all interests presently held in the same issuer combined with
the interest to be acquired
– Aggregation within the “ultimate parent entity” is required; leads to complex analysis of “control”
– Aggregation across multiple transactions may be required
– Aggregation across related entities may not be required
August 18, 2016
26
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

27. What’s the HSR value?
• For determining whether a transaction meets the $78.2 million threshold, valuation
issues are numerous and complex:
– Aggregation of interests requires a re-valuation of any presently-held interests for
determining the value held as a result of the transaction
• Public securities: market price and acquisition price
• Private securities: acquisition price and fair market value
• Non-corporate interests: acquisition price and fair market value
• Assets: fair market value and acquisition price
– Adjustments
• Debt
• Assumed liabilities
• Non-voting securities, warrants, options
• Transaction expenses
August 18, 2016
27
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

28. What is a “transaction”?
• Not all reportable events may be “transactions” in the eyes of the client
– Transfers or reorganizations may trigger HSR filing requirements
– Non-pro rata increases in the percentage of shareholdings may trigger HSR filing requirements
– Exercises of options or warrants that increase holdings in an entity may trigger a filing
requirement
– Secondary transactions where an acquiring person will obtain control of an entity holding voting
securities of another issuer which it does not control is potentially subject to HSR reporting
August 18, 2016
28
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

29. Do you meet the “size of parties”?
• Only for transactions valued at less than $312.6 million
• Generally, one party must have sales or assets of $156.3 million and the other must
have $15.6 million
– Identify the “ultimate parent entity” and test the right values
• Must include all “controlled” entities
• World-wide assets and income
– Use balance sheet and annual income statement
– Test is measure at the time of closing
• Know the order in which deals will close
• Pay close attention to changes in value
August 18, 2016
29
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

30. Exemptions
• Numerous exemptions may be available based on deal structure, corporate structure of
the parties, nature of the underlying assets, or intent of the parties, among others.
– Investment-only exemption
– Institutional investor exemption
– Ordinary course exemption
– Real estate exemptions
– Other subject-based exemptions
– Intraperson exemption
– Creditor exemptions
– Among many others…
August 18, 2016
30
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

31. Recent Civil Penalties Adjustment
• Effective August 1, the maximum civil penalty for HSR Act violations increased from
$16,000 per day to $40,000 per day.
– New amounts, set pursuant to the Federal Civil Penalties Inflation Adjustment Improvements Act
of 2015, are a “catch-up” designed to maintain the deterrent effect of the penalties.
– Under the Act, civil penalties will be adjusted for inflation every January.
August 18, 2016
31
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP

32. Increased enforcement actions
August 18, 2016
32
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP
• Largest fine just announced
– $11 million fine in ValueAct case
– Largest previous fine for an HSR violation was $5.67 million
• Recent enforcement actions
– $484,000 fine on Caledonia Investments for failure to file
– $656,000 fine on investor Len Blavatnik for failure to file
– $240,000 fine on Leucadia National Corporation for improper reliance on the institutional investor
exemption
– Settlement with Third Point for failure to file based on improper reliance on the investment-only
exemption

33. Introduction
August 18, 2016
33
Matthew Hans uses his broad experience in antitrust law to help clients avoid problems in
numerous competition issues including mergers, joint ventures, restraints of trade, exclusive
dealer relationships, and other collaborations among competitors. Matthew also guides
clients through the Hart-Scott-Rodino notification process, and represents clients during
Federal Trade Commission and Department of Justice investigations.
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

34. United States v. VA Partners I, LLC, et al. (“ValueAct”)
• In November 2014, Baker Hughes and Halliburton announced plan to merger. Valued at $35 billion.
• Two of three largest providers of oilfield products and services.
• Filed HSR notifications.
• DOJ conducted an investigation.
• Merger was challenged in April 2016, and then abandoned by the parties.
August 18, 2016
34
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

35. United States v. VA Partners I, LLC, et al. (“ValueAct”)
• In late 2014 and early 2015, ValueAct purchased shares of Halliburton and Baker Hughes
• Valued in excess of $2.5 billion.
• ValueAct is known as an “activist” investment firm.
• Required an HSR filing.
• But ValueAct relied upon “investment-only” exemption to HSR Act and did not make a filing.
August 18, 2016
35
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

36. The “Investment-Only” Exemption
• 15 U.S.C. 18a(c)(9) exempts from HSR notification requirements “acquisitions, solely for the purpose
of investment, of voting securities, if, as a result of such acquisition, the securities acquired or held do
not exceed 10% of outstanding voting securities of the issuer.”
• Voting securities are held “solely for the purpose of investment” if the acquirer has “no intention of
participating in the formulation, determination, or direction of the basic business decisions of the
issuer.” 16 C.F.R. 801.1(i)(1).
• Statement of Basis and Purpose provides some examples of participation, including nominating a
board candidate, serving as officer or director, soliciting proxies, or being a competitor of the issuer.
• FTC’s Premerger Notification Office had interpreted the exemption strictly, requiring investment be
“completely passive” and less than 10% investment. FTC Premerger Notification Office (PNO),
Informal Interpretation No. 1304004 (April 10, 2013).
August 18, 2016
36
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

37. The “Investment-Only” Exemption
• FTC’s Premerger Notification Office had interpreted the exemption strictly, requiring investment be
“completely passive” and less than 10% investment. FTC Premerger Notification Office (PNO),
Informal Interpretation No. 1304004 (April 10, 2013).
• In August 2015, FTC settled with Third Point LLC. Charged that the investment firm could not rely
upon “Investment Only” Exemption because of its conduct after acquiring Yahoo stock, which included:
• contacting individuals about become officers or directors of Yahoo,
• offering to join Yahoo’s board, and
• internally discussing possible proxy battle.
• Settlement did not include civil penalty, but imposed restrictions of firm’s acquisitions for five
years.
August 18, 2016
37
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

38. Complaint against ValueAct
• Filed on April 4, 2016, just two days before case against Halliburton and Baker Hughes was filed.
• Review of that merger lead to evidence for charge against ValueAct.
• Allegations include:
• As major shareholder, ValueAct used access to senior executives of both companies to learn
about the merger, and to influence executives to improve chances that merger would be
completed.
• On website, “active, constructive involvement” in the companies in which it invests.
• Documents showed ValueAct always planned to take an “active role” in the two companies.
• Described holdings as “meaningful enough to have a substantial role in conversations [about the
merger.]”
• Also positioning itself to help restructure the merger if it hit regulatory roadblocks.
• Intended to play role in intergrating the two firms.
August 18, 2016
38
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

39. Complaint against ValueAct
• From December 2014 to January 2016, ValueAct met with companies’ senior management more than
15 times. Multiple meetings with both CEOs. Exchanged emails.
• AAG Renata Hess said “ValueAct was not entitled to avoid the HSR requirements by claiming to be a
passive investor, while at the same time injecting itself in this manner.”
• “Today’s record penalty and important injective relief demonstrate our continued commitment to
vigorous enforcement of these important notification and waiting period requirements.”
August 18, 2016
39
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

40. Record Settlement
• On July 12, 2016, ValueAct agreed to $11 million civil penalty.
• Previous highest for HSR violation was $5.67 million.
• Under old maximum civil penalty of $16,000 per day. Effective August 1, maximum penalty is $40,000.
• In part because ValueAct was a repeat offender. Made corrective filings for three acquisitions in 2003.
And in 2007, ValueAct had paid civil penalty of $1.1 million for failing to file HSR notification on three
separate transactions.
• Also because ValueAct sought to influence merger, it prejudiced DOJ’s ability to enforce the antitrust
laws.
• “Reflects the gravity of the conduct at issue.” Competitive Impact Statement, 16-cv-01672.
• ValueAct also enjoined from using “investment-only” exemption when it intends to influence the
businesses in which it invests.
August 18, 2016
40
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

41. Implications
• Exact parameters of the exemption still not set.
• Avoid conduct listed in SBP.
• ValueAct’s conduct can also be used as example of what to avoid.
• Rely upon the exemption carefully when taking any "active" role in the investments, including
• Making public statements about investment.
• Internally discussing board or management changes.
• Involvement in merger or other strategic plans.
August 18, 2016
41
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

42. Introduction
Aaron Yeater, Managing Principal; M.B.A., strategy and international finance, Yale School of
Management; B.A., College of Social Studies, Wesleyan University
Mr. Yeater specializes in the application of financial and economic analyses to complex
business litigations, with a particular focus on antitrust litigations. He has also evaluated the
competitive effects of mergers and acquisitions in industries including chemicals, oil and gas,
technology and telecommunications. Mr. Yeater has worked closely with clients to prepare
and analyze business data for regulators and has presented economic and financial
analyses to state and federal regulators. He has provided assistance to attorneys on all
phases of pretrial and trial practice including development of models to analyze competitive
effects and damages, critique of analyses produced by opposing experts, and support for
preparation of expert testimony.
August 18, 2016
42
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.

43. Recent Changes in HSR: Implications for Industry
August 18, 2016
43
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.

44. Implications
 2015 HSR Report: The Landscape
 Additional Challenges for Deals with Distressed Firms in the Energy Sector
 Additional Scrutiny of Passive Investments and Institutional Investors
August 18, 2016
44
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.

45. Reported Transactions: 2015
August 18, 2016
45
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
Source: DOJ/FTC 2015 HSR Report
 8% increase over 2014
 2.7% go to Second Request
 2010-2014 average: 3.6%
 78% of transactions sought
Early Termination
 Of these, 80% granted
1,286
1,618
1,754
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2013 2014 2015

46. Hospital/Ambulatory Health Care Transactions Increased
August 18, 2016
46
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
 48% increase over 2014
 Steady increase in
ambulatory
 Recovery in hospitals
19
32
48
48
27
38
0
10
20
30
40
50
60
70
80
90
100
2013 2014 2015
NumberofReportedTransactions
Hospitals
Ambulatory Health
Care
Source: DOJ/FTC 2015 HSR Report

47. Implications
 Despite big news, no increase in Second Requests
 But willing to go to court
 Did St. Luke’s (2013) change the landscape for health care providers?
 Consummated, non-reported deals may still be challenged
 North Shore/Advocate (IL)
 Hershey/PinnacleHealth (PA)
 Increase in hospital/ambulatory care transactions
August 18, 2016
47
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.

48. Reported Transactions Involving Energy Assets
August 18, 2016
48
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
 Decline in deals
involving energy assets
from 2014 to 2015
 Increased scrutiny
 Sector weakness
0
10
20
30
40
50
60
70
80
90
2013 2014 2015
NumberofReportedTrahsactions
Acquirer Target
Notes and Sources: DOJ/FTC 2015 HSR Report
Includes: “Oil and Gas,” “Mining and Mining
Services,” and “Pipeline Transport” Firms

49. Oil Prices Have Declined Since Mid-2014
August 18, 2016
49
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
Notes and Sources:
2016 crude oil
production is based
on the ShortTerm
Energy Outlook, U.S.
Energy Information
Administration, June
2016. Crude oil prices
as of May 31, 2016.

50. Natural Gas Prices Have Also Declined Significantly From 2014 Levels
August 18, 2016
50
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
Notes and Sources:
2016 natural gas
production is based
on the ShortTerm
Energy Outlook, U.S.
Energy Information
Administration, June
2016. Dry natural gas
production is
marketed production
less extraction loss.
Natural gas prices as
of May 31, 2016.

51. Uncertainty for the Future
August 18, 2016
51
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.

52. Implications
 Energy firms may be looking to sell assets to address financial risks
 Elimination of HSR exemptions for natural gas pipelines and warehouse facilities
increases opportunities for scrutiny
 Changes in ownership of energy assets have complex competitive effects
 Vary by region
 “Warehousing” of commodities has garnered additional scrutiny as a potential means of
market manipulation
 FERC and CFTC have recently focused on these tactics
 Firms in financial distress seeking to unload non-core assets may need to take
additional time to assess deal economics and competitive impacts
August 18, 2016
52
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.

53. Reported Acquisitions by Investment Firms
August 18, 2016
53
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
135
176
200
30
46
45
0
50
100
150
200
250
300
2013 2014 2015
NumberofReportedAcquisitions
Funds and Trusts
Securities, Commodity
Contracts, Other Financial
Investments
Source: DOJ/FTC 2015 HSR Report
Financial firms include acquirers categorized as: “Securities,
Commodity Contracts, and Other Financial Investments” and
“Funds and Trusts.”
 Overall increase from
2014 to 2015
 Increased scrutiny of
investment firms

54. Implications
 Increased scrutiny on transactions involving investment firms
 Third Point LLC (August 2015)
 Leucadia National Corp. (September 2015)
 ValueAct Capital (April 2016)
 Broader focus on the role of investors and investment managers in competition
among firms in the same industry
 Azar, Schmalz, Tecu (2015)
 AAI Report (2016), Elhauge (2016), Baker (2016)
 Baer (March 2016)
August 18, 2016
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
48

55. Implications
 Near term:
 Investors review portfolios for cross-ownership
 Does the transaction have antitrust implications?
 What kind of communications with management?
 Financing strategies like PIPES may require an HSR
 Long term:
 If activism is more difficult – will there be less activism?
August 18, 2016
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
48

56. August 18, 2016
56
Contact Info:
Scott P. Perlman
Partner
Mayer Brown LLP
E: sperlman@mayerbrown.com
T: (202) 263-3201
Matthew C. Hans
Shareholder
Polsinelli PC
E: mhans@polsinelli.com
T: (314) 552-6820
Adam Eckart
Senior Associate
Ropes & Gray LLP
E: Adam.Eckart@ropesgray.com
T: (617) 854-2613
Aaron Yeater
Managing Principal
Analysis Group, Inc.
E: aaron.yeater@analysisgroup.com
T: (617) 425-8168

57. ► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type
your question in the box that appears and click send.
► Questions will be answered in the order they are received.
Q&A:
August 18, 2016
57
SEGMENT 2:
Adam Eckart
Senior Associate
Ropes & Gray LLP
SEGMENT 4:
Aaron Yeater
Managing Principal
Analysis Group, Inc.
SEGMENT 1:
Scott P. Perlman
Partner
Mayer Brown LLP
SEGMENT 3:
Matthew C. Hans
Shareholder
Polsinelli PC

58. August 18, 2016
58
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59. August 18, 2016
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