FTC Issues Final Premerger Regulation, HSR Form

As Connecting the Dots reported reported last year, the Federal Trade Commission (FTC) had proposed new Hart­Scott-Rodino Act (HSR) rules, along with a new proposed HSR, that would impose new burdens on businesses. The Metals Service Center Institute advocated against those changes, but the FTC moved forward anyway, issuing a final regulation last week.

Although the final regulation is in some respects less extreme than the original June 2023 draft, its expanded scope will require the collection and production of more information and documentation. In fact, the FTC itself estimates HSR filings now will take, on average, 68 to 121 hours to prepare, up from an average 37 hours currently.

According to the law firm White and Case, the rule now requires:

• A description of planned or known products or services that compete with those of the other party;
• The most recent year’s sales data (by value) for all overlapping products or services;
• A description of the categories of customers that purchase or use the overlapping product or services;
• The top ten customers in the most recent year (by units and sales) and the top ten customers for each customer category in overlapping products or services;
• A description of products, services, or assets representing at least $10 million in sales that are sold to or purchased from the other party or sold to or purchased from a business that competes with the other party or a business that uses such products as an input to compete with the other party;
• A list of top 10 customers that use each party’s products as an input to compete with the other party; and
• Disclosure of products in the research and development pipelines that could compete with the other party’s business; and
• Identification of specific geographic overlaps.

To go with the new HSR rules and form updates, the FTC created an online portal through which market participants, stakeholders, and the general public can submit comments on proposed transactions being reviewed by the U.S. Department of Justice (DOJ) or FTC. The FTC specifically invited comments on how proposed transactions may affect competition.

Read more about this rule from the law firm Holland and Knight at this link.