Kroger has been overcharging grocery customers for years, report alleges
Kroger has been accused of overcharging customers for basic groceries that were advertised as discounted at its stores across the country, according to a three-month-long investigation conducted by Consumer Reports.
After Kroger workers in Colorado alleged the company had widespread price errors and were aware, Consumer Reports sent people to shop at Kroger-owned stores such as Harris Teeter, Ralphs, Fry's and more to determine if the company had overcharged.
The report discovered that at 26 stores across 14 states and the District of Columbia, customers were overcharged for more than 150 basic items due to expired sale labels.
On average, customers paid $1.70 more than needed for everyday items such as cereal, cold and flu medication, instant coffee, meat and more.
A spokesperson for Kroger denied the breadth of the problem, saying, 'The Consumer Reports allegations boil down to misinformation, reviewing a handful of discrete issues from billions of daily transactions.'
'It in no way reflects the seriousness with which we take our transparent and affordable pricing,' the spokesperson added. Kroger is the nation's largest supermarket chain by revenue. It has operations in 35 states.
Consumer Reports alleges their investigation found that one-third of sales tags on items were expired by at least 10 days, and at least five products had sales tags expired by 90 days.
'People should pay the price that is being advertised, that's the law,' Edgar Dworsky, the founder of Consumer World, told Consumer Reports.
'The issue here is that shoppers can't rely on the shelf price being accurate, and that's a big problem,' Dworsky added.
The pricing mistake was not found at every Kroger store.
Fears about consumer prices going up have spread across the country as economists have warned that President Donald Trump's tariffs could cause higher inflation. The Consumer Price Index found that prices rose by 0.2 percent last month, but inflation overall remains the lowest it's been in four years.
But that hasn't stopped consumers from worrying about price increases.
Customers who had complained told Consumer Reports that Kroger employees were quick to correct pricing errors after they were revealed.
Kroger said it's 'committed to affordable and accurate pricing' and that the characterization of widespread pricing was 'patently false.'
'Kroger's 'Make It Right' policy ensures associates can create a customer experience and addresses any situation when we unintentionally fall short of a customer's expectations,' a Kroger spokesperson said. 'Connecting regular technology upgrades and our 'Make It Right' policy to price accuracy is incorrect.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Geeky Gadgets
37 minutes ago
- Geeky Gadgets
Excel's Ultimate FILTER Hack : Multiple Columns Multiple Values
What if you could take the chaos of a sprawling Excel spreadsheet and distill it into exactly the information you need—no fluff, no manual sifting, just precision? For anyone who's ever wrestled with filtering data across multiple columns or criteria, the struggle is real. The typical tools often fall short, leaving you stuck with clunky workarounds or hours of manual effort. But here's the fantastic option: Excel's FILTER function isn't just a tool—it's a powerhouse. When used strategically, it can cut through complex datasets like a scalpel, delivering results that are both dynamic and razor-sharp. If you've ever thought, 'There has to be a better way,' you're absolutely right. Excel Off The Grid reveal the full potential of the FILTER function, showing you how to tackle even the most intricate filtering tasks with confidence. You'll discover how to use logical expressions like AND, OR, and NOT to refine your data, extract rows based on multiple criteria, and even optimize performance for massive datasets. Whether you're managing sales reports, analyzing regional trends, or working with text-heavy data, these techniques will transform how you approach Excel. By the end, you'll not only save time but also gain a newfound mastery over your spreadsheets—proof that even the most overwhelming data can be tamed with the right tools and strategies. Excel FILTER Function Explained Understanding the Excel FILTER Function The FILTER function is a dynamic tool in Excel that allows you to extract rows of data based on specific criteria. Unlike static filtering methods, it automatically updates the results whenever the source data or criteria are modified. This dynamic nature makes it an essential feature for managing large datasets or frequently updated information. By using the FILTER function, you can significantly reduce manual errors and save time, making it a valuable asset for data analysis and reporting. Filtering Data Across Multiple Columns and Criteria When filtering data across multiple columns with multiple criteria, a structured approach is essential. Simple filters may not suffice for complex datasets, but logical expressions can help refine your results. For instance, you might need to extract rows where one column meets a condition (e.g., 'Region = North') and another column satisfies a different condition (e.g., 'Sales > 5000'). Combining these criteria ensures that your filtered data is both relevant and accurate. To achieve this, the FILTER function can be combined with logical operators such as AND, OR, and NOT. These operators allow you to define relationships between conditions, allowing you to create tailored filtering rules that adapt to your specific needs. Excel's Ultimate FILTER Hack Watch this video on YouTube. Discover other guides from our vast content that could be of interest on Excel functions. Building Logical Expressions for Advanced Filtering Logical expressions form the backbone of advanced filtering in Excel. They allow you to define complex conditions and apply them seamlessly within the FILTER function. Here's how the key logical operators work: AND: Ensures all specified conditions are true. For example, 'Region = North AND Sales > 5000' will only include rows where both conditions are met. Ensures all specified conditions are true. For example, 'Region = North AND Sales > 5000' will only include rows where both conditions are met. OR: Allows any of the specified conditions to be true. For example, 'Region = North OR Region = South' will include rows where either condition is satisfied. Allows any of the specified conditions to be true. For example, 'Region = North OR Region = South' will include rows where either condition is satisfied. NOT: Excludes specific data. For example, 'NOT Region = West' will filter out rows where the region is 'West.' By embedding these logical expressions within the FILTER function, you can handle even the most intricate filtering tasks with ease. This approach is particularly useful when working with datasets that require multiple layers of criteria. Practical Examples of Advanced Filtering To better understand how to apply these techniques, consider the following examples: Example 1: Imagine a dataset with columns for 'Region,' 'Sales,' and 'Product.' To extract rows where the region is either 'North' or 'South' and sales exceed 5000, you can use a combination of AND and OR operators within the FILTER function. This ensures that only rows meeting all specified conditions are displayed, providing a focused view of your data. Imagine a dataset with columns for 'Region,' 'Sales,' and 'Product.' To extract rows where the region is either 'North' or 'South' and sales exceed 5000, you can use a combination of AND and OR operators within the FILTER function. This ensures that only rows meeting all specified conditions are displayed, providing a focused view of your data. Example 2: For text-based filtering, such as extracting rows where the product name contains specific keywords, you can combine the FILTER function with text functions like SEARCH or FIND. This method is particularly effective for datasets with extensive text fields, allowing you to pinpoint relevant information quickly. These examples illustrate how logical expressions and the FILTER function can simplify complex filtering requirements, making it easier to analyze and interpret your data. Optimizing Performance for Large Datasets When working with extensive datasets, performance optimization becomes a critical consideration. The following techniques can help ensure that your FILTER function operates efficiently: Limit the data range: Narrow down the range being filtered to minimize processing time and improve responsiveness. Narrow down the range being filtered to minimize processing time and improve responsiveness. Use helper columns: Break down complex criteria into simpler components by creating additional columns. This approach not only enhances performance but also improves the readability of your formulas. Break down complex criteria into simpler components by creating additional columns. This approach not only enhances performance but also improves the readability of your formulas. Use structured references: Use Excel's structured references to create dynamic and scalable filtering solutions. Structured references adapt automatically to changes in your dataset, reducing the need for manual adjustments. By implementing these strategies, you can maintain optimal performance even when dealing with large and complex datasets. Troubleshooting Common FILTER Function Challenges Despite its versatility, the FILTER function can occasionally produce unexpected results or errors. Here are some common issues and their solutions: Empty results: Verify that your criteria are correctly defined and match the dataset. Double-check for typos or mismatched data formats. Verify that your criteria are correctly defined and match the dataset. Double-check for typos or mismatched data formats. #CALC! errors: Ensure that the ranges and dimensions used in your FILTER function are valid and properly aligned. Mismatched ranges can lead to calculation errors. Ensure that the ranges and dimensions used in your FILTER function are valid and properly aligned. Mismatched ranges can lead to calculation errors. Performance lags: Optimize your dataset and formulas using the techniques outlined earlier, such as limiting the data range and using helper columns. By addressing these challenges proactively, you can ensure smooth and error-free filtering, allowing you to focus on analyzing your data rather than troubleshooting issues. Mastering the FILTER Function for Advanced Data Analysis The FILTER function in Excel is a powerful tool for advanced data extraction and analysis. By mastering logical expressions, handling multiple columns and criteria, and optimizing your approach, you can tackle even the most complex filtering tasks with ease. Use the techniques and examples outlined in this guide to enhance your Excel skills, streamline your workflows, and unlock new possibilities for data analysis. With practice and attention to detail, you'll be able to use the full potential of the FILTER function to transform the way you work with data. Media Credit: Excel Off The Grid Filed Under: Guides Latest Geeky Gadgets Deals Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.
Reuters
43 minutes ago
- Reuters
US stock futures fall after Israel attacks Iran
June 13 (Reuters) - U.S. stock index futures dropped on Friday after Israel's military strike on Iran escalated tensions in the oil-rich Middle East and battered risk sentiment across global markets. Israel's widescale strikes against Iran's nuclear facilities were aimed at preventing Tehran from building an atomic weapon. Iran has promised a harsh response and retaliated by launching 100 drones. The escalation of tensions in the Middle East - a major oil-producing region - sent oil prices surging more than 6% and U.S. energy stocks rose in tandem, with Chevron (CVX.N), opens new tab and Exxon (XOM.N), opens new tab advancing nearly 3% in premarket trading. The strikes come just days ahead of a planned sixth round of nuclear talks between Iran and the United States. Tensions had been building as U.S. President Donald Trump's efforts to reach a nuclear deal with Iran appeared to be deadlocked. U.S. Secretary of State Marco Rubio called the Israeli offensive a "unilateral action" and said Washington was not involved. At 04:32 a.m. ET, Dow E-minis were down 505 points, or 1.17%, S&P 500 E-minis were down 70.5 points, or 1.17%, and Nasdaq 100 E-minis were down 309.25 points, or 1.41%. A 1.6% slump in Russell futures pointed to sharp declines for domestically focused stocks. Airline stocks dipped as the surge in crude prices raised concerns about higher fuel costs. Delta Air Lines (DAL.N), opens new tab was down 3.9%, United Airlines (UAL.O), opens new tab dropped 4.8%, Southwest Airlines (LUV.N), opens new tab lost 2.5% and American Airlines (AAL.O), opens new tab declined 3.9%. Defense stocks rose, with Lockheed Martin (LMT.N), opens new tab up 4.7%, RTX Corporation (RTX.N), opens new tab up 5.5%, Northrop Grumman (NOC.N), opens new tab up 4.2% and L3harris Technologies (LHX.N), opens new tab up 4.3%. The S&P 500 (.SPX), opens new tab still remains just 1.8% below its record high reached earlier this year, following stellar monthly gains in May driven by upbeat corporate earnings and a softening in Trump's trade stance. The tech-heavy Nasdaq (.IXIC), opens new tab is about 2.8% off its record closing high reached in December last year. Investors are now focused on the Federal Reserve's meeting scheduled next week where policymakers are expected to keep interest rates unchanged.
Reuters
an hour ago
- Reuters
Acquisitions of US Public Companies by Non-US Acquirors Practical Law The Journal
Non-US investors continue to play an important role in the US M&A environment. In 2024, approximately one-quarter of announced transactions with US public company targets (43 of 169 transactions) involved a non-US acquiror. This activity accounted for about $91.6 billion (19%) of the aggregate transaction value. (Deal Point Data (Mar. 16, 2025) (subscription required).) (For more on US public M&A in 2024, see What's Market: 2024 Year-End Public M&A Wrap-Up on Practical Law.) Robust public company deal activity was initially expected in 2025 due to increasingly favorable domestic conditions compared to prior years, such as strong US economic growth relative to other western economies in recent years, declining borrowing costs, and indications that a more relaxed US regulatory environment may materialize. While M&A activity in the first half of 2025 has generally faltered due to global economic uncertainty and market turbulence, observers remain hopeful that inbound investment activity will accelerate in the latter half of 2025, driven in part by a desire among non-US investors to mitigate their exposure to the Trump administration's protective trade policies. (For the latest US tariff-related developments, see Key Developments Under the Trump Administration Regarding Imports and Tariffs: 2025 Tracker on Practical Law.) While facial similarities may exist between certain aspects of a US public company transaction and an M&A transaction outside the US, there are significant substantive divergences in practice and policy due to the unique legal and macroeconomic environment in the US. It is therefore imperative that non-US investors approach a potential US public company acquisition not only with an awareness of these differences but with the assistance of legal and financial advisors that have a recognized track record in the US market. This article highlights key considerations that non-US acquirors should understand before pursuing M&A with a US public target, including: Due diligence. Transaction disclosure. Transaction structures. Directors' fiduciary duties. Regulatory issues. Shareholder litigation. (For a collection of resources to assist counsel in negotiated M&A transactions involving a US public company target, see Public Mergers Toolkit on Practical Law.) Due Diligence A central objective of an acquiror's due diligence investigation is uncovering and understanding the risks associated with a potential acquisition. Due diligence findings also inform an acquiror's: Negotiating strategy. Assessment of the optimal transaction structure. Integration analysis. Post-closing integration strategy. Due diligence investigations of US public company targets are often conducted on an accelerated timeline, and it is customary in US public company transactions to permit prospective bidders to undertake only limited confirmatory due diligence. US securities laws require public companies to regularly make detailed public filings with the Securities and Exchange Commission (SEC) regarding a broad array of topics, and potential acquirors therefore typically already have access to a fulsome public record regarding their target before formally proposing a transaction. Prospective acquirors are generally expected to have availed themselves of this public information and be in a position to move quickly to submit a binding offer. (For more on US public company periodic reporting and disclosure obligations, see Periodic Reporting and Disclosure Obligations: Overview on Practical Law.) The object of US public company due diligence is to efficiently confirm and supplement findings based on the public record. This is typically accomplished through the submission of a targeted list of questions aimed at clarifying and supplementing the potential acquiror's existing understanding of the target's business. The target may also facilitate oral diligence sessions with the target's management team so that the potential acquiror can better understand the target's business from the perspective of management, as well as quickly resolve any queries for management regarding operational items. It is important for a prospective bidder to demonstrate that it has already made a good faith effort to obtain a general understanding of the target business because a broad 'kitchen sink' approach to diligence is almost certain to cause friction with a US public company target. Non-US investors may be unaccustomed to relying on public information for due diligence purposes and view information provided directly by the target as more reliable. However, they should be aware that the bulk of the information regarding the target will be derived from the target's public filings. These filings are governed by US securities laws, and there are potentially significant consequences for the inclusion of materially misleading statements or omissions in them, including: Enforcement action by the SEC against the target, which may lead to fines and other penalties. Shareholder litigation based on deficient disclosures and reputational damage. (For more information, see Securities Litigation and Enforcement: Overview on Practical Law.) All of these risks help provide prospective acquirors with some assurance about the veracity of information included in public filings. Acquirors can also protect against undisclosed risks that were not uncovered in the due diligence process by negotiating for comprehensive representations and warranties in the acquisition agreement. The representations and warranties in a US-style acquisition agreement serve two functions: They encourage further disclosure of risks by the target in the schedule of exceptions to the acquisition agreement. The representations and warranties are qualified and excepted based on information provided in this schedule. (For more information, see Disclosure Schedules: Mergers and Acquisitions on Practical Law.) They give the acquiror the ability to walk away from the transaction if the representations and warranties given by the target are not accurate (to a negotiated standard) at closing. Representations and warranties serve to create alignment between the interests of the target and acquiror with respect to disclosure and address the inherent information asymmetry between these parties by motivating fulsome disclosure by the target. (For an overview of due diligence in US public M&A and key guidance on organizing, implementing, and conducting a comprehensive due diligence review, see Due Diligence for Public Mergers and Acquisitions on Practical Law.) Transaction Disclosure Generally, there is no requirement under US law to disclose a potential acquisition before the execution of definitive agreements, nor is there any requirement to correct rumors or misstatements by third parties or make a binding statement regarding the acquiror's intention to move forward with a transaction following a leak. However, a US public company target may be required to disclose ongoing negotiations or respond to a leak if: The negotiations are material and the target is trading in its own securities. The target is responsible for the leak or is in the process of registering any of its securities. The disclosure is required to prevent prior statements made by the target from becoming materially misleading. A target must announce entry into a merger agreement and file it with a current report on Form 8-K with the SEC, though schedules or similar attachments may be omitted if they do not contain information material to an investment or a voting decision or not otherwise disclosed. A detailed chronology of transaction negotiations must also be disclosed in the publicly filed proxy statement used to solicit shareholder votes, as well as in public filings for tender offers. (For more on disclosure in US public mergers, including press releases, current reports on Form 8-K, merger proxy statements, and other communications with stockholders, see Public Mergers Disclosure: Overview on Practical Law.) Transaction Structures There are two principal mechanisms used to acquire US public companies in friendly transactions: A one-step or statutory merger, in which one legal entity is merged with and into a surviving legal entity. While there are various formulations that a one-step merger may take, the most common is a reverse triangular merger in which the acquiror creates a merger subsidiary, which is subsequently merged with and into the target company with the target surviving as the acquiror's subsidiary. A two-step merger, structured as an initial public offer to purchase the target company's shares followed by a statutory merger. Mergers are governed by the state laws applicable in the target's jurisdiction of organization. In the case of a two-step merger, the offer to purchase the target company's shares must also comply with federal securities laws. (For more on transaction structures in public M&A, see Public Mergers: Overview and Tender Offers: Overview on Practical Law.) One-Step Merger A one-step merger requires the acquiror to negotiate the terms of the merger with the target's management, board of directors, or both. The boards of the target and the acquiror each approve the investigation of a potential transaction and task a small group of individuals with confidentially exploring a potential transaction and, if appropriate, negotiating a definitive merger agreement with the assistance of legal and financial advisors. Once a merger agreement has been agreed to between the acquiror and target's deal teams, it must be formally approved by the boards of both the target and the acquiror and recommended to the target's shareholders for approval. While the parties may enter into the merger agreement once board approval is obtained, consummation of the transaction is subject to approval by the target's shareholders, and the target must promptly commence the process for coordinating an annual or special shareholders' meeting to consider approval of the transaction. Unlike in certain foreign jurisdictions, no judicial review or approval is required for the transaction. Once the parties enter into the merger agreement, the pending transaction becomes public knowledge because the target public company is required to announce it by filing a current report on Form 8-K with the SEC. The target must also file a proxy statement with the SEC containing information regarding the transaction as a part of its shareholder consent solicitation process (for more information, see Proxy Statements: Public Mergers on Practical Law). It typically takes 10 to 12 weeks to obtain shareholder approval, though this process may vary based on state law and meeting requirements in the target's organizational documents. During the period between public announcement and the time shareholder approval is obtained, the transaction is at risk of being frustrated by a competing bid from an interloper. Acquirors therefore attempt to negotiate for protective features to ensure that their position remains equal to or better than that of any interlopers. Protective features may include: Break-up fees, which require the target to pay the thwarted acquiror a fee if the transaction fails due to a competing bid (for more information, see Break-Up or Termination Fees on Practical Law). The right to match a competing bid. Force the vote provisions requiring that the target submit the proposed transaction for a shareholder vote. No-shop provisions preventing the target from soliciting competing bids (for more information, see No-Shops and Their Exceptions on Practical Law). The acquiror may also seek to enter into voting agreements with major shareholders that contractually bind those shareholders to vote in favor of the acquiror's proposed transaction, or even allow the target to solicit competing bids before entry into a formal merger agreement with the acquiror, to minimize the risk that a competing bidder emerges at a later stage. However, as discussed below, deal protections must be carefully weighed against the target directors' fiduciary duties (see Director Fiduciary Duties below). Two-Step Merger In a negotiated two-step merger, the acquiror negotiates and enters into a merger agreement with the target and then publicly launches an offer to purchase the target's shares directly from its shareholders for cash (tender offer), securities of the acquiror (exchange offer), or some combination of both. Federal securities laws require, among other things, that: The acquiror publicly file a Schedule TO with the SEC containing detailed information regarding the transaction, such as the offer price and conditions of the offer (for more information, see Schedule TO on Practical Law). The offer remains open for at least 20 business days. If there is a material change to the terms or conditions of the offer (for example, a change in the offer price or the number of securities being purchased), federal securities laws may impose a mandatory extension to the offer period of up to ten business days. Non-US acquirors considering a two-step merger should be aware that tendered shares may be withdrawn by the target's shareholders until the offer period expires. Therefore, similar to a one-step merger, interloper risk remains high from the time the offer to purchase is publicly announced until the offer period expires. If at the conclusion of the offer period the acquiror has obtained enough shares to approve a merger as a shareholder under applicable state law (typically 50% to two-thirds of shares entitled to vote thereon), it proceeds with a back-end statutory merger to complete its acquisition of the target. In various states, no shareholder approval for the back-end merger is required if the acquiror has obtained a specified percentage of the target's shares (typically 90% but in some states less) and certain other conditions are met. Two-step mergers can be completed in as little as six to seven weeks and have historically been favored in transactions that do not require intensive regulatory approvals or long periods between signing and closing. However, recent changes to the US antitrust regime are expected to substantially increase the time required to prepare certain filings, so the utility of a two-step structure may be reduced moving forward (see Regulatory Issues below). Additionally, the usage of securities as transaction consideration generally increases the timeline in either transaction structure because federal securities laws require the acquiror to file a registration statement for these securities (for more information, see Registration Statement: Form S-4 and Business Combinations on Practical Law). Non-US acquirors that are not already registered with the SEC should note that the time and expense of this registration may limit the desirability of using securities as consideration and require them to disclose information about themselves and their shareholders that may not already be in the public domain. Director Fiduciary Duties The fiduciary duties of directors of US corporations may differ significantly from those in a non-US acquiror's jurisdiction. In the US, directors' fiduciary duties are established by the corporate law applicable in the target's jurisdiction of incorporation. Most commonly, US public companies are incorporated in Delaware, where directors owe two core fiduciary duties to the corporation and its shareholders: The duty of care, which requires directors to act in an informed and considered manner and exercise the care that a prudent businessperson would when considering a business decision. The duty of loyalty, which requires directors to act in good faith on an independent and disinterested basis and to make decisions in the best interest of the corporation and its shareholders. Directors of companies incorporated in other US states are generally subject to similar fiduciary duties. Different considerations may apply if the US target is a non-corporate entity. Directors' decisions are generally entitled to judicial deference under the 'business judgment rule' if challenged in court by shareholders or other stakeholders. The business judgment rule establishes a rebuttable presumption that directors have acted in accordance with their fiduciary duties where the director's impugned decisions can be attributed to any rational business purpose and there is insufficient evidence to disseat the presumption that the director was informed and acted in good faith for the best interest of the corporation and its shareholders. Delaware corporate law affords directors this high standard of protection based on the fundamental principle that directors, not shareholders or the courts, are responsible for managing the business and affairs of the corporations they serve. However, directors' conduct and decision-making processes may be scrutinized more carefully in M&A transactions due to the heightened potential for conflicts of interests between the corporation and its shareholders, and directors of the target corporation, who may seek to entrench themselves or obtain other personal benefit from the transaction. Once it becomes clear in a cash transaction that a change of control of the target corporation is inevitable, the object of target directors' fiduciary duties shifts toward seeking to secure the transaction that offers the best value reasonably available to the target's shareholders. Directors' duties in this context are colloquially referred to as 'Revlon' duties and require that directors have a reasonable basis to conclude that the price obtained for the target's shareholders is the best available. This assessment is made without regard to the interests of other stakeholders, such as employees, or the transaction's consistency with the target's existing business plans. There are several common procedures directors employ in these circumstances to assist with price discovery and to demonstrate they have satisfied their Revlon duties. For example, directors may obtain an opinion from a financial advisor on the fairness of the consideration, or conduct an auction or targeted process aimed at soliciting offers from multiple bidders. Importantly, Revlon duties prohibit directors from agreeing to coercive or preclusive deal protections and, in the case of a transaction requiring shareholder approval, require that the target's directors remain free to change their recommendation of the transaction to shareholders. While ultimately dependent on the precise facts and circumstances of a particular transaction, granting a prospective acquiror the right to match a competing offer or including a termination fee of up to 4% of equity value are not typically deemed to be coercive or preclusive measures. In a change of control transaction where it is determined that an actual conflict of interest exists, directors' conduct and the terms of the transaction are not subject to judicial deference. Instead, they are generally reviewed according to an onerous 'entire fairness' standard, though Delaware has recently introduced new statutory safe harbors that may offer protection from the application of this standard for certain controlling stockholder and interested officer and director transactions. This standard presumes that the transaction was tainted by the conflict of interest and requires directors to demonstrate the entire fairness of the transaction. To do so, directors must provide evidence of fair dealing in the procedural aspects of the transaction and that they obtained a fair price in light of the relevant economic and financial considerations of the transaction. It is difficult but not impossible for directors to demonstrate the entire fairness of a conflicted transaction. (For more on the duties of care and loyalty under Delaware law, see Fiduciary Duties of the Board of Directors on Practical Law.) Regulatory Issues Foreign investment in US public companies is often subject to regulatory approval and notification requirements, which vary according to the nature of the transaction. Regimes of particular note for non-US investors are: Antitrust (competition) review under the HSR Act (for more information, see Hart-Scott-Rodino Act: Overview on Practical Law). Review for national security implications by CFIUS (for more information, see CFIUS Review of Acquisitions and Investments in the January 2025 issue of Practical Law The Journal). In recent years, the US antitrust authorities and CFIUS have demonstrated increasing willingness to intervene in transactions, though it remains to be seen whether this trend will continue under the Trump administration. Given the new administration's posture regarding foreign investment in sensitive assets and industries, it is likely that CFIUS scrutiny regarding investments by non-US acquirors will remain elevated or intensify. The HSR Regime Under the HSR Act, pending acquisitions that will result in the acquiror owning more than a specified amount of voting securities or assets of a target engaged directly or indirectly in US commerce must be reported to and approved by the Federal Trade Commission and the Department of Justice (DOJ) prior to consummation. These transactions are subject to a minimum 30-day waiting period (lowered to 15 days for tender offers) that commences on the filing of a pre-merger notification form. The pre-merger notification form requires that the parties provide extensive information regarding themselves and the transaction, including materials and emails by or for senior management or directors relating to the transaction's competitive implications. The parties may even be required to disclose unsolicited pitch books or other materials prepared by their advisors if they touch on competitive implications. If the reviewing agency determines that further inquiry is required after reviewing the pre-merger notification form, it may issue a second request for information. A second request can substantially lengthen the timeline of a transaction, as well as require the parties to agree to certain concessions, including divestitures, to obtain approval for the transaction. In recent years, the US antitrust authorities and CFIUS have demonstrated increasing willingness to intervene in transactions, though it remains to be seen whether this trend will continue under the Trump administration. Given the potential for an extended review process, the parties typically seek to prepare and file the pre-merger notification form as early as possible. Because recent amendments to the HSR form have significantly expanded the information required in the filing, HSR filings require a substantial amount of time to prepare and close coordination with counsel and senior management. (For more on recent changes to the HSR form, see HSR Rule Changes in the January 2025 issue of Practical Law The Journal.) The CFIUS Regime Acquisitions of US companies by non-US buyers may attract regulatory scrutiny due to national security concerns. CFIUS is an interagency committee comprising the heads of several governmental departments and offices, including the Department of Homeland Security, the DOJ, and the State Department. Federal legislation empowers CFIUS to initiate a review of transactions involving non-US investors that could potentially affect national security, including the acquisition of a US target collecting sensitive personal data of US citizens or involved in critical technologies or infrastructure. Unlike under the HSR regime, it is generally voluntary to provide CFIUS with notice of a pending transaction. Nevertheless, voluntary notice is typically given where there is a reasonable likelihood that a proposed transaction will attract scrutiny from CFIUS. There is a strong incentive to obtain preclearance of this type of transaction because the acquiror could otherwise be required to agree to divestitures or other remedial actions post-closing if CFIUS independently initiates a review after learning of the transaction. If voluntary notice is given, a 45-day review period commences, after which the transaction is either cleared or proceeds to an investigation period that may last up to an additional 45 days. If the investigation determines the transaction presents national security risks, CFIUS may seek mitigative measures from the parties, refer the transaction to the president for determination of whether to block it, or both. Referrals to the president are rare because a transaction that is not cleared during investigation by CFIUS is most often withdrawn by the parties and abandoned or renegotiated due to the failure to obtain required regulatory approvals. Shareholder Litigation Shareholder litigation is accepted as a standard part of US public company acquisitions. These transactions are routinely subject to claims by the target's shareholders that the directors failed to satisfy their fiduciary duties, or allegations that a disclosure made by the target in SEC filings contained material misstatements or omissions. Acquirors may also be named as defendants in the lawsuits, particularly where the acquiror had already obtained a toehold in the target and is alleged to have used its influence as a major shareholder to extract value at the expense of other shareholders. (For more on shareholder securities litigation claims, see Securities Litigation and Enforcement: Overview on Practical Law.) Shareholder litigation rarely delays the consummation of a transaction or results in material damages or settlements relative to the overall transaction value. Rather, the primary consequences of shareholder litigation in US public company transactions tend to be the incurrence of attorneys' fees and the time and expense of preparing additional disclosures regarding ongoing litigation that is required to be included in SEC filings made in connection with the transaction. Given the prevalence of shareholder litigation in the US, it is also customary for the acquiror of a US public company to agree to indemnify the target's directors and officers for any lawsuits that may be levied against them for their service in such capacities. A portion of the cost of indemnifying the target's directors and officers may be offset against the target's existing directors and officers insurance policies, if any exist. Acquirors should engage with counsel and their counterparties early on in the transaction to ensure that all parties understand best practices for minimizing the risk of shareholder litigation. For example, transactions involving a perceived conflict of interest, such as those initiated by management or a controlling shareholder of the target company, tend to have greater incidence of shareholder litigation and higher settlement costs. Non-US acquirors should be mindful that the broad scope of the discovery process in US litigation may require them to produce extensive correspondence relating to the transaction (such as emails and text messages). Therefore, all correspondence from the beginning to the end of a transaction should be created under the assumption that it may become public in connection with litigation. Regulators may also request to review deal correspondence when considering whether to grant approval of or challenge a transaction. Additionally, acquirors may be required to bear the expense of any post-closing settlement costs or damages rendered in ongoing 'stock drop' litigation against a US public company target, which is a prevalent form of securities litigation in the US where the shareholders of a public company bring a class action lawsuit alleging that false or misleading statements in the company's public filings caused a significant drop in share price. These lawsuits often take several years to resolve, and associated costs should be factored into the acquiror's assessment of the value expected to be obtained from the transaction.
