Life's about to get more interesting for parties filing premerger notification and report forms under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976.
HSR is the law that requires parties to notify the Federal Trade Commission (FTC) and Department of Justice Antitrust Division in the event of large mergers, acquisitions, joint ventures, and other corporate transactions before their deals are consummated. Filing parties must typically wait 30 days after filing HSR forms before their deals can close. The FTC issued a Notice of Proposed Rulemaking (NPRM) to overhaul the HSR process in June 2023. To put it mildly, the proposed changes were massive, and a relatively straightforward process was poised to become significantly more time-consuming and expensive. The NPRM triggered approximately 721 comments from businesses and individuals, not all of whom supported these changes. After considering the comments and doing further analysis, the FTC backed off on some proposed changes and announced new ones.
The Nelson Mullins team is still making its way through 468 pages of the final rule released on Oct. 10, but here are three highlights we've noticed so far:
- The new rules will go into effect 90 days after the Final Rule is published in the Federal Register. Assuming this happens in the next week, the new rules will be effective by mid-January 2025. Until then, filings will be made on the current form following the current rules.
- Acquiring and acquired parties will file separate forms specific to their status as acquiring or acquired parties and follow separate sets of instructions. While today both buyer and seller file HSR forms, they file the same form (though some questions are not applicable to sellers) and follow the same instructions. Under the new rules, buyers and sellers will be treated differently. Buyers, in particular, will be required to provide significant new information not currently required.
- Translation of foreign language documents into English will be mandatory. Today, translations are provided only if they already exist. Under the new rules, all foreign language documents required to be produced must be translated into English. While translation software will be helpful, this still requires significant planning in advance for foreign filers.
We will continue to review the new rule and report on material changes.
