The U.S. Federal Trade Commission (“FTC”), with the concurrence of the Antitrust Division of the U.S. Department of Justice (“DOJ”), announced late last month proposed changes the premerger notification form and rules under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”).
The proposed changes would substantially increase the amount of information and level of review required by filing parties. A significant increase in the time required to prepare filings and heightened antitrust scrutiny of transactions are likely to result from these changes as well.
The changes included in the 133-page notice of proposed rulemaking will require significantly more information when filing the form, including:
- Details about transaction rationale and details surrounding investment vehicles or corporate relationships
- More information relating to products and services sold by the parties, including the identity of major customers
- Projected revenue streams, transactional analyses and internal documents describing market conditions and structure of entities involved, such as private equity investments
- Details regarding previous acquisitions
- Information that screens for labor market issues by classifying the parties’ employees based on current Standard Occupational Classification system categories.
The Notice of Proposed Rulemaking was published Thursday in the Federal Register. The 60-day public comment period ends Aug. 28, and the proposed changes could become effective by the end of 2023.
We will continue to monitor the proposed changes and provide further updates.
Navigating the HSR notification process requires a complex and nuanced analysis of the transaction and relevant law. Failure to properly comply with the HSR Act can result in civil penalties up to $50,120 per day.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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