On June 27, 2023, the Federal Trade Commission (“FTC”), in concurrence with the Antitrust Division of the Department of Justice (“DOJ”), announced plans to publish a 133-page Notice of Proposed Rulemaking (“Notice”) to amend and overhaul the Hart-Scott-Rodino Form and Instructions. The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, requires all persons contemplating certain mergers or acquisitions that meet or exceed certain jurisdictional thresholds to file a premerger notification (an “HSR Filing”) with the FTC and DOJ and to wait a period of time before consummating the transaction.
The proposed revisions are intended to significantly bolster federal antitrust enforcers’ ability to assess the potential competitive impact of HSR reportable transactions by significantly increasing the scope and amount of information parties to the transaction will be required to prepare and provide for review. Specifically, key proposed additions include:
- Provision of details about transaction rationale and the details surrounding investment vehicles or corporate relationships;
- Provision of information related to products or services in both horizontal products and services and non-horizontal business relationships such as supply agreements;
- Provision of projected revenue streams, transactional analyses and internal documents describing market conditions and structure of entities involved, such as private equity investments;
- Provision of details regarding previous acquisitions; and
- Disclosure of information that screens for labor market issues by classifying employees based on current Standard Occupational Classification system categories.
The FTC estimates that these additional requirements could add an average of 107 hours to the time it currently takes to prepare an HSR Filing and could significantly increase the lead time required for reportable transactions. Institutions that may be involved in a future reportable transaction should consider the impact of the updated per-merger notification process carefully and reach out to their antitrust counsel to discuss the impact of this Notice on transaction timing and potential antitrust review and enforcement of the transaction.
This proposal furthers the bipartisan sentiment both in the Administration and Congress to increase oversight of mergers and acquisitions. Earlier this month, the Senate Finance Committee held a hearing to discuss consolidation in health care and its impact on access, quality and cost of care. Agreeing that “cracking down on consolidation” is an area of consensus across the aisle, Senators agreed to continue investigating this issue and develop bipartisan, bicameral solutions focusing on deterring anticompetitive merger activity. We expect more hearings and potential legislation from Congress in the upcoming months due to this increased attention on consolidation.
The Notice is scheduled to be published in the Federal Register on July 29, 2023. Once published, a public comment period will be open for 60 days. Hall Render continues to review the Notice and the comments coming from the Administration and Congress and will publish an in-depth analysis of the proposed regulation in the near future. If you have any questions on how to prepare and submit a comment in the meantime, please contact:
- Michael Greer at (317) 977-1493 or mgreer@hallrender.com;
- John Bowen at (317) 429-3629 or jbowen@hallrender.com;
- Abigail Kaericher at (202) 742-9674 or akaericher@hallrender.com; or
- Your regular Hall Render attorney.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
