Parties to transactions that are reportable under the Hart-Scott-Rodino Antitrust Improvements (HSR) Act must observe a mandatory pre-close waiting period—30 days for most transactions—after reporting the transaction to the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ).
The agency charged with reviewing the transaction can seek additional time by either (1) asking the parties to pull and refile their reporting forms, restarting the waiting period, or (2) issuing a second request for more information, which then gives the reviewing agency another 30 days after the parties certify their substantial compliance with the second request.
As the volume and complexity of transactions have increased over the years, and staffing levels have remained relatively flat, agency requests for more time have become commonplace. The FTC’s effort to “modernize” the HSR reporting form, requiring transacting parties to provide the agencies with even more information, will likely add to the burden of reviewing reported transactions.
According to FTC Chair Lina Khan and fellow Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya, the HSR Act itself must now be “modernized for today’s economy.” As noted in Chair Khan’s statement accompanying the annual report on the FTC and DOJ’s administration of the HSR Act, the statutory waiting periods “were set in an era where lawmakers expected the agencies would receive around 150 merger notifications per year—rather than 150 per month,” and the “FTC staff are routinely at the mercy of the merging parties granting extensions of the statutory deadlines so that staff has the necessary time to review the transaction.”
If the HSR Act is modernized, as Chair Khan requests, a review process that can already take upwards of a year will no doubt take longer.
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