On 10 October 2024, the U.S. Federal Trade Commission (“FTC”), in agreement with the Antitrust Division of the Department of Justice (“DOJ”), announced the FTC’s unanimous decision to adopt a Final Rule that enacts substantial modifications to the reporting requirements under the Hart-Scott-Rodino Antitrust Improvement Act (“HSR Act”). These modifications will increase the filing load for merger parties in M&A transactions and restrict their capacity to submit expeditiously, even in unproblematic transactions. In the absence of judicial action, the final rule will take effect 90 days post-publication in the U.S. Federal Register, approximately mid-January 2025.

Under the current HSR Act, merging parties involved in specific transactions are required to inform the FTC and DOJ of the transaction and adhere to a mandated waiting period prior to closing. Thus, the HSR notification form requires that merger parties provide basic information about the undertakings involved, their activities, revenue intersections, and the planned transaction, in addition to submitting specific transaction-related documents.

In the future, the new final rule will require additional information, including but not limited to: (i) descriptions of existing or potential horizontal overlaps and vertical or supply relationships between the merger parties, accompanied by extensive sales data, customer information, and licensing or supply arrangements; (ii) transaction-related documents created by or for “supervisory deal team leads” in addition to officers and directors; (iii) information regarding the parties’ minority investors; (iv) a narrative description with citations to documents produced with the HSR of all strategic rationales for the transaction that also addresses any inconsistencies with the transaction rationale(s) in documents included in the HSR filing; (v)  regularly prepared plans and reports provided to CEOs as well as plans and reports provided to the merger parties’ Boards of Directors that discuss market shares, competition, competitors, or markets for any overlapping product or service created within a year of filing;  and (vi) information regarding foreign government subsidies.

The modifications to the final rule signify a fundamental change in the historical review and investigative procedures of U.S. antitrust agencies, imposing the obligation on filing parties to provide comprehensive justifications and analyses, as well as to gather extensive factual information for almost all reportable transactions as observers note.