The DOJ and FTC have issued new regulations that refine the type of information and documentation companies must submit in connection with premerger notification filings under the Hart-Scott-Rodino Antitrust Improvements Act. While the form eliminates some information, the expanded definitions of (1) what constitutes a "4c" document, (2) what revenues must be reported and (3) what constitutes an "associated entity" will likely increase the burden and cost for both parties to the transaction. A summary of the changes follow:
- Acquiring companies now are required to submit information about "associated entities." Associated entities are those that are "commonly managed" by the same business as the purchaser. In the past, information about these entities have been excluded because they are not considered "controlled" by the ultimate parent entity of the acquirer under HSR regulations. The impact of this change is likely to be most significant on private equity and/or hedge funds.
- The new rules also require that "pitch books," confidential information memos and other materials created by third parties that are not specifically related to the transaction also be provided. This could include materials that officers and directors receive from third parties like investment bankers and consultants, even if the documents are not directly related to the transaction.
- In the past, companies could report revenues from products manufactured abroad as imports, in much the same manner as they do for U.S. Census filings. Under the new regulations, companies will be asked to provide detailed product codes for foreign-manufactured goods just as they would for domestic products.
- On the positive side, the revised rules eliminate the need to provide copies of filings with the U.S. Securities Exchange Commission, economic "base year" data, and detailed listings of all the voting securities acquired in a transaction.
The new regulations will go into effect on August 7, 2011. A copy of the FTC notice may be found here, the new form can be found here and the text of the notice in the Federal Register can be found here.