As the February 10, 2025, implementation deadline for the new Hart-Scott-Rodino (HSR) filing forms and instructions rapidly approaches, companies that are considering acquisitions or mergers, whether as a buyer or seller, should turn their attention toward preparing for the changes.
It is old news that the HSR filing form and instructions have changed significantly. While much has been written about the final rule and the burden companies face as a result, this summary focuses on what companies can do today to prepare for the February changes.
The Federal Trade Commission (FTC) estimates that complying with the new filing rules will add 68 hours to HSR filing timing, but others suggest it will take much more time. The bulk of the additional time will be spent in two main areas: 1) collecting and reviewing documents and 2) collecting and reviewing information.
What Companies Can Do to Prepare
To smooth out the time crunch and reduce the risk that comes with producing more documents and information, companies can take the following three steps:
1. Engage antitrust counsel to train the company’s teams in mitigating antitrust risk in document drafting.
The new rules expand the request for documents from both parties. Given the breadth of the document requests, it will be essential for the company’s management to consider antitrust risk when drafting documents. Companies should refresh document creation guidance and offer training for management.
There are two main areas of increased document requests.
First, for transaction-related documents such as competition documents (e.g., item 4 documents), the FTC has added the supervisory deal team lead as a custodian. The supervisory deal team lead is defined by the FTC as “the individual who has primary responsibility for supervising the strategic assessment of the deal, and who would not otherwise qualify as a director or officer.” Second, the instructions require the production of plans and reports not previously required for HSR filing. The FTC defines plans and reports as:
- Prepared regularly
- Defined as quarterly, semiannually, or annually but not monthly and not one-off reports
- Filed within one year
- Provided to the chief executive officer
- Analyze the following:
- Market shares
- Competition
- Markets
- Related to a product or service of the acquiring person/target also produced, sold, or known to be under development by the acquiring person/target
2. Evaluate whether the company has any potential interlocking directorates.
The HSR form requires details about the acquiring entity’s board of directors (BOD), including identifying the officers and directors who served as an officer or director of another entity that derives revenues in the same reporting category as the target within the acquiring entities (i.e., not isolated to the ultimate parent entity).
This information increases the risk that agencies may open a separate investigation into whether the company’s directors and officers have a competitive overlap with their other appointments (e.g., a Section 8 interlocking directorate investigation). In accordance with the Clayton Antitrust Act of 1914, companies should review their BOD’s other board affiliations and seek antitrust advice to comply with the interlocking directorate law.
3 . Start collecting customer, supplier, and sales information as soon as an acquisition seems likely.
The form requires the identification of key customers and suppliers along with sales and purchase-amount figures. The agencies previously sought this information on a voluntary basis only after the agency opened a preliminary investigation. Companies often struggle to pull this information together quickly, and the requirement to provide the information with the filing could create delays with getting on file.
Companies contemplating a transaction in the next 60 days should seek guidance on the specific information required and identify the best point of contact within the company to collect the information quickly.
Next Steps
To be sure, there are additional changes to the forms, including that the acquiring party and the acquired party forms are distinct from each other’s and that non-English documents be translated. Companies should prepare for a filing process that will require more than the previously typical 10–15 business days.
Contact Robin Crauthers at McCarter & English to arrange document-drafting guidance trainings, and for a full discussion of the changes and information required.