Federal Trade Commission Revises Premerger Notification Rules and Report Form

The Federal Trade Commission, with the concurrence of the Antitrust Division of the Department of Justice, announced on July 7, 2011 revisions to the Hart-Scott-Rodino Premerger Notification Rules.1 The new Rules expand the categories of documents to be produced, delete certain data requests and make several ministerial changes, all in an effort to focus the review process on those categories of information the antitrust agencies consider most helpful in evaluating the potential competitive impact of a proposed transaction.

The new Rules do not affect the notification thresholds.2 Every transaction subject to the current HSR reporting requirements will also require an HSR Premerger Notification and Report Form under the new Rules. The Report Form itself is being revised and the information and data to be produced will change in some significant respects. Examples of material changes include:

• The new Rules will require disclosure of information regarding an entity that, although not controlled by a Party, has the right to manage the operations of an acquiring entity or is managed by the acquiring entity.3 To date, managed entities have been excluded from a Party’s family tree absent specific indicia of control.
• The new Rules will require submission of offering memoranda, transaction-specific marketing presentations, financing documents and other materials that present the details of a company or part of a company to be sold.4 Historically, only documents directly related to the transaction in question that referenced specifically delineated competitive issues were to be produced in response to Item 4(c).
• The new Rules will require production of strategic planning materials prepared by investment bankers, consultants or other advisors within a year before the HSR filing if those materials reference the acquired entity or the assets to be acquired.5 This revision captures documents that analyze strategic options or potential acquisition targets perhaps well before a decision is made to pursue a reportable transaction.
• The new Rules will also require the filing of most studies and documents evaluating or analyzing the potential synergies and/or efficiencies of a reportable transaction.6 Interestingly, the FTC highlighted in its comments that efficiency studies performed in advance of an HSR filing “may carry greater weight with the Agencies” than materials prepared and submitted during an investigation.

The new Rules will become effective 30 days after their publication in the Federal Register. The Premerger Notification Office will no longer accept the current Report Form after the effective date of the new Rules. Parties considering a merger or acquisition subject to the HSR filing requirements should carefully examine the new Rules.

Should you have questions, please contact Clifton E. Johnson at 317.977.1430 or cjohnson@hallrender.comor Michael R. Greer at 317.977.1493 or mgreer@hallrender.com.

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1. The new Rules are available here.
2. 15 U.S.C. § 18a(a); 16 CFR §§ 801.1(h), (n), 801.40(c), and 801.50(b).
3. 16 CFR § 801.1(d)(2).
4. Premerger Notification and Report Form, Item 4(d)(i).
5. Id., Item 4(d)(ii).
6. Id., Item 4(d)(iii).

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.