The Federal Trade Commission and the Department of Justice’s Antitrust Division have proposed changes to the merger review process under the Hart-Scott-Rodino Antitrust Improvments Act that could make preparing filings “significantly more expensive and time-consuming in 2024,” according to attorneys with the Polsinelli law firm.
The FTC calls for information to be reorganized and supplemented, and the changes would implement the Merger Filing Fee Modernization Act of 2022, which requires agencies to collect information on subsidies received from some foreign governments or entities that are strategic or economic threats to the United States.
“These changes would bring HSR filings more in line with the filings required in other jurisdictions around the world,” according to attorneys at Cohen & Gresser.
The proposed revisions to the premerger notification process would be the first significant changes to the filings under the HSR Act since the late 1970s, noted attorneys with Polsinelli’s antitrust team. If the revisions are adopted, then a new HSR filing would require much more information to be disclosed and would increase the burden on the filing parties, the lawyers said.
The changes also would almost quadruple the time needed to complete the process, going from an average of 37 hours to an average of 144 hours per filing, estimates the FTC.
Additionally as part of the changes, the process would become fully electronic, with more detailed information required.
“No more filing on letters of intent, indications of interest, or other preliminary agreements without submission of additional documents describing the transaction. Now the parties must include a term sheet or draft definitive agreement that provides sufficient detail to show the scope of the deal and confirm the transaction ‘is more than hypothetical,’ ” the Polsinelli attorneys wrote.
Filing parties also would be required to submit details about their organizational structures, officers, directors and boards and shareholders, as well as other types of stakeholders who could exert influence over a merger.
Additionally, the proposed changes would require English-language translations for all foreign-language documents submitted with the initial HSR filing.
It is not known when the changes, if approved, would be effective, but experts speculate that it could happen before the end of the year. The public is invited to submit comments to the FTC online here on or before Aug. 28.
