FTC Announces Final Changes to Hart-Scott-Rodino Reports

On October 10, 2024, the Federal Trade Commission (“FTC”) published the final version of changes affecting the Hart-Scott-Rodino (“HSR”) reporting requirements, which were the subject of a previous notice of proposed rulemaking . The new HSR rules will take effect in mid-January 2025 (90 days after official publication in the Federal Register), impacting all HSR reportable transactions in which the parties submit their respective HSR filings on or before the effective date. after her.

A detailed summary of the final regulations will be released by Dechert’s antitrust/competition group. Key changes that will have a significant impact on the burden for most requesting parties include the following:

Expand the relevant custodians to provide transaction-related documents that analyze competition beyond officers and directors, to include the supervisor of each merger party’s negotiation team;
Require the submission of certain documents in the normal course relating to competition, market shares, competitors or product and service markets where the requesting parties overlap;
Add new disclosure obligations relating to products or services that are under development;
Require sellers to disclose prior acquisitions in the same or related lines of business;
Increase the amount of disclosure required regarding investors in the buyer and other entities in the same chain of ownership, including limited partners with board/management rights;
Increase requirements on records made from letters of intent or similar preliminary agreements to now require a draft agreement, term sheet or other dated document containing certain material terms of the transaction;
Mandate disclosure of foreign subsidies as required by Congress under the Merger Registration Fee Modernization Act of 2022; and
Require the translation of documents in a foreign language.

The FTC also modified or abandoned certain proposals in response to comments received from Dechert and other members of the public, such as:

Restrict the scope of limited partner disclosures (which the FTC noted was in response to comment filed by Dechert’s antitrust/competition group);
Limit the amount of mandatory information to be disclosed about directors and officers and eliminate the proposal to disclose positions held by board observers;
Elimination of the obligation to present draft document forms; and
Not adopting many of the labor requirements.

The FTC also confirmed that the “temporary” suspension of early termination grants from the initial HSR waiting period (which has been in effect since February 2021) will be lifted once the new rules take effect. The current electronic filing platform that has been used since March 2020 will remain in effect until further notice as the FTC continues to develop a new interface.