On July 7, 2011, the US Federal Trade Commission (FTC) issued significant changes to the premerger Notification and Report Form required under the Hart-Scott Rodino Act. Under the new regime, the thresholds remain unchanged but companies will notably have substantially greater reporting requirements relating to their ownership of minority interests in other companies:
- An acquiring firm now must report certain infor• mation regarding entities that are not affiliates (e.g., parents, subsidiaries), but that are “associates.”
- An acquiring party also must list any minority holdings that overlap with the acquired entity or acquired assets. This requirement includes listing each associate that holds a minority position of five percent or more in an entity, including a minority position in a non-corporate entity, and that derived dollar revenues in the most recent year from operations in industries that overlap with the acquired company. Further, for each such holding by an associate, the acquiring party must identify the entity in which the interest is held and the percentage held. Companies will also be required to list each associate of the acquiring party that, in the prior year, generated revenue in the same industry as the acquired company.
- While filing parties no longer have to report revenues for a base year (most recently 2002), the revised HSR Form will require the submission of additional documents. These include analyses of synergies, even if these analyses do not mention competitive issues. In addition, such documents must be submitted even in transactions in which there is no competitive overlap.
The new rules will become effective on August 18, 2011.