FTC, DOJ Announce Final HSR Rules Requiring Significant Additional Reporting Obligations, Including Expanded Scope Of Document Production

Key Points

The FTC and DOJ have announced final changes to the HSR filing rules, which will become effective on August 18, 2011. The changes require parties to submit additional transaction-related information and may significantly increase the HSR filing burden. Filing parties should now expect to provide an expanded set of documents with the HSR form and will want to take into account the new HSR filing requirements when negotiating and drafting deal-related documents. Private equity firms and investment firms should consider updating their record-keeping procedures in light of the additional information they are now required to submit. Parties are well advised to develop clear and consistent articulations of the procompetitive rationales for the transaction, the potential synergies and efficiencies that will result, and the key themes to be communicated to customers, employees, and the antitrust agencies before the HSR notification is filed. Under the Hart-Scott-Rodino ("HSR") Act, codified as Section 7A of the Clayton Act, 15 U.S.C. § 18a, parties to certain mergers and acquisitions must file notification and report forms with the Federal Trade Commission ("FTC") and the Antitrust Division of the Department of Justice ("DOJ") and must observe a waiting period before consummating the transaction to allow the agencies to review the deal's potential competitive implications. The FTC and DOJ recently announced significant amendments to the HSR Premerger Notification Rules (the "Rules") and the instructions to the HSR form that expand the scope of information required to be filed with the HSR form. The new Rules do not affect whether a filing is required but are designed to ensure that the agencies receive relevant information to assist them in conducting their initial review. The rule changes will go into effect on August 18, 2011. Parties to potential transactions need to understand these rule changes and take them into account during pre-transaction planning.

New Rules Require Significant Additional Documentary Material Be Provided with the HSR Form

The most significant change in the Rules is the addition of a new Item 4(d) to the HSR form that requires submission of new categories of documents not previously required by the HSR form. Item 4(d) documents include confidential information memoranda ("CIMs") and similar documents, documents that evaluate or analyze synergies or efficiencies, and certain documents prepared by investment...