Retail Grocery Firms And Retail Drug Firms - Corporations For Specific Purposes - CA Corporations

Section § 14700

This section of the law states that if someone wants to buy voting shares or assets of a retail grocery or drug firm, both the buyer and seller have to notify the Attorney General in writing. If it's a tender offer, only the buyer needs to notify. The term 'acquiring party' refers to the person or entity getting control through a merger and must meet certain criteria, like notifying federal authorities or buying more than 20 similar firms. The law also defines 'retail drug firm' and 'retail grocery firm', relating to businesses classified under specific retail trade categories.

(a) No person shall acquire, directly or indirectly, any voting securities or assets of a retail grocery firm or retail drug firm unless both parties give, or in the case of a tender offer, the acquiring party gives, written notice to the Attorney General in accordance with this part.

(b) For purposes of this part, the following definitions apply:

(1) “Acquiring party” means a person by whom or on whose behalf the merger or other acquisition of control is to be effected and is either of the following:

(A) Is required to provide notice of the merger or acquisition to the Federal Trade Commission or the United States Department of Justice pursuant to the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15 U.S.C. Sec. 18a).

(B) Is acquiring more than a total of 20 retail drug firms or retail grocery firms.

(2) “Retail drug firm” means a person, as defined in Section 18 of the Labor Code, including a proprietorship, joint venture, corporate officer or executive, that has one or more businesses or establishments located within the state and is identified as a retail business or establishment in the North American Industry Classification System within the retail trade category 45611.

(3) “Retail grocery firm” means a person, as defined in Section 18 of the Labor Code, including a proprietorship, joint venture, corporate officer or executive, that has one or more businesses or establishments located within the state and is identified as a retail business or establishment in the North American Industry Classification System within the retail trade category 44511 and 455211.

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(Added by Stats. 2023, Ch. 457, Sec. 2. (AB 853) Effective January 1, 2024.)

Section § 14701

This law requires companies planning an acquisition to notify the California Attorney General at least 180 days before it happens. If the acquisition has already started by the time this law takes effect, the company must notify within 30 days before the acquisition is finalized. If the circumstances change, updated information must be provided within two business days. The notice should include detailed information about the business, its finances, and potential impacts on consumers, workers, and communities. Fees based on the size of the transaction will be charged for processing this notice. The Attorney General can use the information in legal proceedings if necessary.

(a) The written notice shall be filed with the Attorney General no less than 180 days before the acquisition is made effective. The notice shall be made under oath or affirmation, and shall comply with the requirements of subdivision (c).

(b) If any transaction requiring written notice pursuant to this subdivision commences before the effective date of this section, the written notice shall be given to the Attorney General within 30 days before the transaction is made effective. Upon receiving notice, the Attorney General has 180 days to evaluate the transaction, during which time the effective date of the transaction shall be tolled. If any material change occurs in the facts set forth in the written notice filed with the Attorney General, an amendment setting forth the change and copies of all documents and other material relevant to the change shall be filed with the Attorney General within two business days after the amendment is made by, or provided to, the acquiring party.

(1) If the acquiring party is required to file notice with the Federal Trade Commission or the United States Department of Justice pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15 U.S.C. Sec. 18a), the notice shall contain the same form and additional documentary material required under that act and any implementing regulations under that act.

(2) If the acquiring party is not required to file notice with the Federal Trade Commission or the United States Department of Justice, as specified in paragraph (1), the notice shall contain all of the following information:

(A) The name and address of each acquiring party and a report of the nature of its business operations during the past five years or for a lesser period if the person and their predecessors have been in existence less than five years.

(B) An informative description of the business intended to be done by the person and the person’s subsidiaries, including, but not limited to, documents concerning its business or corporate structure, governance, or management.

(C) A list of all individuals who are or have been selected to become directors or executive officers or who perform or will perform functions appropriate to the positions.

(D) The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction in which funds were or are to be obtained, including any pledge of the drug or grocery retail firm’s stock or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing the consideration. If a source of the consideration is a loan made in the lender’s ordinary course of business, the identity of the lender shall remain confidential upon request of the person filing the statement.

(E) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five fiscal years or for a lesser period if the acquiring party and its predecessors have been in existence for less than five years, and similar unaudited information as of a date not earlier than 90 days before the written notice.

(F) Any plans or proposals that an acquiring party may have to liquidate the retail grocery or retail drug firms, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management.

(G) The information required to assess the competitive effects of the proposed acquisition, giving particular attention to the effects on the proposed chain retail grocery store acquisition on consumers, including, but not limited to, consumer choice, food pricing, access to food, and food deserts, and factors affecting the supply of experienced grocery workers, including wages, benefits, and unemployment and chain retail pharmacy on patients, including, but not limited to, patient choice, medicine pricing, access to medications, and factors affecting the supply of licensed pharmacists, pharmacy technicians, and pharmacists-in-charge.

(H) Information required to assess the economic and community impact of any planned divestiture or store closures, including, but not limited to, the impact on food deserts, food supply, economic mobility, unemployment, and small businesses.

(d) The Attorney General shall charge the acquiring party a filing fee for the cost to the Attorney General to receive, review, and analyze any notice under this section, which shall not exceed the reasonable regulatory costs to the Attorney General incident to performing its administrative duties under this section. The fee shall be based on the size of the transaction as of the date of the filing of the notice, but shall not exceed .00045 of the dollar amount of the combined sales of the parties to the merger or acquisition for the fiscal year prior to the filing of the notice.

(e) The Attorney General may use the notice, documents, and information disclosed under this section in a judicial action in state or federal court or an administrative action involving the merger or acquisition.

acquisition notification Attorney General business operations Hart-Scott-Rodino transaction evaluation material change documentary requirements filing fee competitive effects economic impact store closures community impact food pricing access to medications licensed pharmacists

(Amended by Stats. 2024, Ch. 41, Sec. 20. (SB 164) Effective June 29, 2024.)

Section § 14702

This law allows the California Attorney General to create rules to protect workers, consumers, and the public. These rules might include exceptions for certain business deals that wouldn't significantly impact competition because of their size, employee count, or business volume. The Attorney General can also ask for more information if needed and adjust filing fees for business transactions, with a cap on how high these fees can be.

(a) The Attorney General may adopt regulations to effectuate this part that are necessary or appropriate for the protection of workers, consumers, and the public interest.

(b) The regulations may specify exemptions from the notice requirement for acquisitions that, by virtue of the size, business volume, or number of employees are unlikely to materially affect competitive markets in California.

(d) The regulations may authorize adjustments in the filing fee, based on the size of the transaction, subject to the maximum amount set forth in subdivision (d) of Section 14701.

Attorney General regulations worker protection consumer protection public interest acquisition notice exemptions market competition impact additional materials request filing fee adjustments transaction size business volume employee number exemption criteria fee cap regulatory authority competitive markets

(Added by Stats. 2023, Ch. 457, Sec. 2. (AB 853) Effective January 1, 2024.)

Section § 14703

This law says that if the Attorney General isn't finished evaluating how a business deal might affect competition, they can ask a court in Sacramento to temporarily pause the deal. This pause gives them enough time to complete their review.

If the Attorney General determines that they cannot complete an evaluation of the competitive effects of the acquisition before the parties intend to consummate the acquisition, the Attorney General may seek an order from the Superior Court of the County of Sacramento temporarily staying or preliminarily enjoining the acquisition for such time as is reasonably necessary for the Attorney General to complete the analysis.

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(Added by Stats. 2023, Ch. 457, Sec. 2. (AB 853) Effective January 1, 2024.)

Section § 14704

This law deals with how California's Attorney General handles information during certain business acquisitions, especially when it relates to federal regulations. If you've submitted sensitive information to the U.S. Department of Justice or Federal Trade Commission, the Attorney General can use the same documents to comply with state laws. If your data is marked as confidential under federal rules, it's also considered confidential under California law. You can label your information as privileged or confidential, but if there's a dispute, you can go to court in Sacramento to keep it private. The Attorney General can share information with other states or federal agencies, but only if those agencies have similar confidentiality rules.

(a) For acquisitions to which Section 18a of Title 15 of the United States Code applies, the Attorney General shall consider the extent to which information required to be submitted to the United States Department of Justice and the Federal Trade Commission may satisfy some or all of the need to carry out the applicable state laws. Any information that has been submitted to the Attorney General under provisions of federal law rendering them confidential shall be deemed to be confidential under California law.

(b) The submitting party may designate information submitted pursuant to this part as privileged or confidential. If the Attorney General disputes any claim of privilege or confidentiality, the Attorney General may give notice to the submitting party of that fact and give the submitting party, or other person interested in the claim of privilege or confidentiality, an opportunity to seek an order from the Superior Court of the County of Sacramento requiring the Attorney General not to make the designated information public. Except for information that the Attorney General agrees is privileged or confidential, or the court so determines, the information shall be available to the public under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).

(c) The Attorney General may disclose any notice and information filed under this part to the attorney general of any other state, the Federal Trade Commission, the United States Department of Justice, or to another state agency, as long as that other state attorney general, state agency, or federal agency operates under a law substantially similar to this statute to guarantee the privileged or confidential nature of the notice and information disclosed.

acquisitions Attorney General confidential information U.S. Department of Justice Federal Trade Commission privilege claim California Public Records Act Sacramento Superior Court submission designation interagency disclosure state competition laws federal confidentiality Section 18a Title 15 confidential data protection state-federal cooperation

(Added by Stats. 2023, Ch. 457, Sec. 2. (AB 853) Effective January 1, 2024.)

Section § 14706

This law section states that the Attorney General or any person has the right to take legal action to stop or reverse a business acquisition if it reduces competition, even if the acquisition is already completed.

Nothing in this section or any other law shall preclude the Attorney General or any person from bringing an action pursuant to this article or any other law to enjoin or seek divestiture of assets or ownership interests obtained in a completed acquisition or otherwise to restore competition.

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(Added by Stats. 2023, Ch. 457, Sec. 2. (AB 853) Effective January 1, 2024.)

Section § 14707

Failing to provide required written notices or amendments is against the rules. If this happens, the Attorney General can go to court for orders to stop the violation and apply other fair solutions. The Attorney General can also recover legal fees and costs from fixing the issue and can charge a civil fine of up to $20,000 for each day the rules aren't followed.

(a) The failure to provide written notice, amendment to written notice, or other material required to be provided pursuant to this part shall be a violation of this part.

(b) In addition to any legal remedies the Attorney General may have, the Attorney General shall be entitled to injunctive relief and other equitable remedies a court deems appropriate for a violation of this part, shall be entitled to recover its attorney’s fees and costs incurred in remedying each violation, and shall be entitled to civil penalties of up to twenty thousand dollars ($20,000) for each day of noncompliance with the requirements of Section 14700.

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(Added by Stats. 2023, Ch. 457, Sec. 2. (AB 853) Effective January 1, 2024.)