Companies now need to be even more careful when considering an acquisition or sale. On August 18, 2011, significant changes to the Hart-Scott-Rodino (HSR) disclosure form will go into effect. Although the new form contains a variety of changes, the most significant is the addition of Item 4(d), which requires the submission of three categories of what the Federal Trade Commission refers to as “additional documents” beyond those already covered by Item 4(c).
First, parties must now submit “Confidential Information Memoranda” that describe the entity or assets for sale or to be acquired. The FTC has now made clear that Confidential Information Memoranda must be disclosed, whether or not the documents contain competition-related material, and whether or not they relate to the specific transaction covered by the form. As long as the materials relate to the entity or assets at issue and were created within one year of filing, they must be disclosed.
Second, parties must now submit studies, surveys, analyses, and reports prepared by consultants and investment bankers, regardless of whether the documents relate to the specific transaction covered by the form, and regardless of whether any party solicited the documents. This includes materials created by consultants and investment bankers for the purpose of seeking the engagement. Again, as long as the materials relate to the entity or assets at issue and were created within one year of filing, they must be disclosed.
Finally, parties must submit documents that assess efficiencies or synergies, whether or not the documents contain competition-related content. These materials must be disclosed only if they are transaction-specific. There is no one-year limitation on the materials, however.
Filing parties should study these new requirements closely, as they will expand the document collection, review, and production burden associated with an HSR filing.