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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On October 10, the Federal Trade Commission (FTC) issued its long-awaited <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/p110014hsrfinalrule.pdf">final rule</a> implementing changes to the rules, forms and instructions for filings under the Hart-Scott-Rodino (HSR) Act. These rules will take effect 90 days after their publication in the Federal Register—likely by mid-January 2025.

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The original proposed rule generated widespread opposition, with some support, due to concerns over the substantial burdens it would have placed on filing parties. In its <a href="https://www.ftc.gov/news-events/news/press-releases/2024/10/ftc-finalizes-changes-premerger-notification-form?utm_source=govdelivery">news release</a>, the FTC explained that the revised final rule reflects the need to address “changes in corporate structure and deal-making, as well as market realities in the ways businesses compete, that have created or exposed information gaps that prevent the agencies from conducting a thorough antitrust assessment of transactions subject to mandatory premerger review.” This rationale is evident in the new rule, which aims to fill these gaps by requiring more information from private equity and investment firms, additional documents prepared in the ordinary course of business and narrative descriptions of the commercial relationships between parties.

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Although the final rule scales back some of the more burdensome provisions initially proposed by the FTC last year, it still increases filing obligations. For example, the FTC did not adopt a controversial proposal requiring submission of drafts of so-called Item 4(c) documents—transaction-related documents that analyze competition-related issues such as markets and market shares—a requirement which would have significantly increased the time and expense required to collect and review potentially responsive documents. That proposal was not adopted. Similarly, the final rule dropped a proposal to require detailed labor-related disclosures, such as employee classification information.

Despite these revisions, the new rule imposes more onerous obligations for filing parties than the current rule.   Below are key new obligations:

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These examples represent only a sampling of the new requirements. According to the FTC’s own estimates, preparing an HSR filing under the revised rule will take an additional 68 hours on average, for a total of more than 100 hours per filing under the new rule. Although the final rule is less onerous than the proposed rule, it increases the burden of filing by a significant margin.

With the new requirements taking effect in early 2025, companies contemplating mergers or acquisitions should evaluate their compliance policies now and implement strategies to manage the additional time and expense required under the revised HSR filing process.

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2024/10/New-HSR-Rules-Significantly-Increase-Filing-Burden.pdf

New HSR Rules Significantly Increase Filing Burden

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