10/16/2024 | Press release | Distributed by Public on 10/16/2024 13:35
Highlights
New FTC and DOJ rules will require a narrative description of any competitive overlap, including any anticipated or pipeline products, before merger clearance
Acquiring parties must disclose past acquisitions in the industry as well as minority ownership
The new rules could go into effect as early as January 2025
On Oct. 10, 2024, the Federal Trade Commission (FTC) and the Justice Department Antitrust Division announced their final rule implementing significant changes to the premerger disclosures required by the Hart-Scott-Rodino Act (HSR). A notable change is that both parties to a merger or acquisition that meets the HSR threshold must file a premerger notification form with information the FTC estimates could take two to three times longer to collect.
The new rule will go into effect 90 days after publication in the Federal Register, which could be as soon as January 2025.
New Requirements
The new compliance process reorganizes the premerger notification forms, implementing separate forms for the acquiring person and the target, and greatly increases the breadth and types of documents and information required. The new disclosure categories include:
Implications of the HSR Final Rule Changes
The FTC is being transparent about how much time this new documentation will take.
Other Changes Dropped from the June 2023 Proposed Rule
The FTC had originally sought far more expansive changes in its June 2023 proposed rule but rejected or modified many of those changes after consideration of the substantial number of public comments and objections. For example, the proposed rule would have required production of expansive labor market information and required the creation of entirely new documents. The FTC had also sought "draft" documents, and a larger number of "ordinary course" documents. The final rule drops these requirements.
Takeaways
The new HSR rule is a significant expansion of the disclosures required prior to completion of certain mergers and acquisitions. Parties should consider planning for organizing these documents earlier to avoid needless delay of any affected transactions.
For more information, please contact the Barnes & Thornburg attorney with whom you work or Kendall Millard at 317-231-7461 or [email protected] or Edward Satchwill at 317-261-7876 or [email protected].
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