On October 10, 2024, the Federal Trade Commission (“FTC”) announced their unanimous vote to finalize changes to the premerger notification form and associated instructions, as well as the premerger notification rules implementing the Hart-Scott-Rodino (“HSR”) Act. The HSR 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 (the “Agencies”) and to wait a period of time before consummating the transaction.
According to the Agencies, the final rule (“Final Rule”) is a response to “changes in corporate structure and deal-making, as well as market realities in the ways businesses compete, that have created or exposed information gaps that prevent the agencies from conducting a thorough antitrust assessment of transactions subject to mandatory premerger review.” The Final Rule does not change or impact the thresholds which determine whether a filing is required, but does significantly update the filing process and alters the scope and scale of the information required from parties to a proposed transaction.
The Final Rule incorporates public feedback received on the FTC’s notice of proposed rulemaking, published on June 29, 2023. Though the FTC stated it removed several of the proposed rule’s requirements that were especially burdensome on filing parties, the Final Rule will still considerably increase the scope of information parties to the proposed transaction will be required to prepare and provide for review. Specifically, key reforms include:
- A broader document production requirement – both in terms of what type of information is considered responsive to filing rules and for whom those responsive documents were prepared;
- In-depth narrative descriptions detailing the strategic rationale behind the transaction, descriptions of overlaps in services and existing relationships between the parties; and
- Disclosure of the corporate structure of the buyer, including identifying officers, directors and investors.
In addition to these updates to the HSR Form, the FTC announced two ancillary updates to the HSR and transaction review process:
- First, the FTC is developing a new e-filing portal. The Agencies will, at the appropriate time, issue a separate rule to provide instructions and access to the new system. Until that time, filers will continue to use the current e-filing platform that has been in use since March 2020.
- Second, the FTC introduced a new online portal for market participants, stakeholders and the general public to directly submit comments on proposed transactions that may be under review by the FTC.
Next Steps
The Final Rule will be effective 90 days after it is published in the Federal Register. The FTC’s Premerger Notification Office will be working to provide future compliance guidance in advance of the Final Rule’s effective date. For practical purposes, the updated requirements in the Final Rule will likely affect transactions for which filings are required starting mid-January 2025.
Hall Render continues to review the Final Rule and will publish an in-depth analysis in the near future. If you have any questions on how the Final Rule may affect your upcoming transaction or 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;
- Hannah Clarke at (317) 429-3615 or hclarke@hallrender.com;
- Bennett Murphy at (317) 429-3618 or bmurphy@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
