The Federal Trade Commission has approved through a unanimous vote a final rule that will require parties to certain mergers and acquisitions to provide more information to help FTC and the Department of Justice’s antitrust division better screen M&A transactions for potential competition issues.
FTC said Thursday the final rule seeks to update the premerger notification form required under the Hart-Scott-Rodino Act and will take effect 90 days following its publication in the Federal Register.
“Premerger review is a critical task for the antitrust agencies and to do it well, we need information about each deal’s potential antitrust risk,” said Shaoul Sussman, associate director for litigation of the FTC’s Bureau of Competition.
“This rulemaking is a much needed update to address changes in the marketplace that have undermined the agencies’ ability to detect and prevent illegal mergers, while at the same time creating a more efficient review process,” Sussman added.
DOJ concurred with FTC’s move to finalize changes to the premerger notification procedures.
“Access to better information at the beginning of the merger review process ensures that the antitrust agencies can devote our resources to the most important issues and reduces the burden on filers, third parties, and other market participants,” Jonathan Kanter, assistant attorney general of DOJ’s antitrust division, said in a statement published Thursday.
Key Premerger Notification Reforms
Under the final rule, the supervisor of each merging party’s deal group should provide additional transaction documents and a small set of high-level business plans related to competition.
Companies should also include in their notification forms descriptions of their business lines to reveal existing competition areas between the merging parties.
The forms should also disclose investors in the acquirer, including those with management rights, and include information on subsidies secured from certain foreign governments or entities that pose economic or strategic threats to the U.S.
In June 2023, FTC and DOJ proposed the rule to update the premerger notification form, which has been in use since 1978.
