On Oct. 10, the Federal Trade Commission (FTC) unanimously approved the proposed changes to the Premerger Notification Rules (Rules) that implement the Hart-Scott-Rodino Antitrust Improvement Act, 15 U.S.C. § 18 (the HSR Act) along with updates to the Premerger Notification and Report Form for Certain Mergers and Acquisitions (HSR Form) and related instructions.

Under the HSR Act, parties to large mergers and acquisitions meeting annually updated thresholds must file an HSR Form with the FTC and the Antitrust Division of the U.S. Department of Justice (DOJ) at least 30 days before the proposed transaction closes (the Waiting Period) to allow the government time to determine whether the proposed transaction may violate the antitrust laws. During the Waiting Period, the FTC and DOJ review the HSR Form and typically:

1. Grant early termination of the Waiting Period, which will allow the parties to proceed with the transaction before the Waiting Period ends;
2. Make a second request for information, which extends the Waiting Period and allows for further investigation of the transaction; or
3. Allow the Waiting Period to expire and the parties to close their deal.

The FTC approved its final rule (Final Rule) on Oct. 10, which amends the Rules and the HSR Form to require parties to include in their HSR Form substantial additional information regarding the proposed transaction, including with respect to the rationale for the transaction, information regarding supply relationships, and additional information about the buyer, among other things. Specifically, the FTC highlights the following “key reforms” in the Final Rule:

• Additional transaction documents from the supervisor of each merging party’s deal team, as well as a small set of high-level business plans related to competition;
• A description of the business lines of each filer to reveal existing areas of competition between the merging firms — including for products or services that are in development — and supply relationships; and
• Disclosure of investors in the buyer, including those with management rights.¹

While the Final Rule expands the information the HSR Form requires and increases the time, cost, and resources required to complete the HSR filing, the Final Rule’s information requirements are substantially narrower than the FTC’s originally proposed rule, making the Final Rule less onerous than it could have been. The Final Rule becomes effective 90 days after the date of its publication in the Federal Register.²

The FTC also announced a new online portal where it will receive comments regarding transactions that may be under review.³ This portal provides access to anyone, including market participants and the general public, who may wish to submit comments, including information on specific transactions and how such transactions may affect competition from consumers, workers, suppliers, rivals, business partners, advocacy organizations, professional and trade associations, local, state, and federal elected officials, academics, and others.

The FTC has advised that once effective, the Final Rule will reinstate parties’ right to request early termination of the Waiting Period, which the FTC suspended at the beginning of the COVID-19 pandemic.

Taft continues evaluating the Final Rule and is available to assist in analyzing the impact it may have on upcoming transactions.

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¹See FTC Finalizes Changes to Premerger Notification Form.

²The Final Rule is available here.

³The FTC’s comment portal is located here.