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United States: Sweeping changes to the HSR form effective

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In brief

The new premerger filing form and rules for complying with the Hart-Scott-Rodino Act (HSR Act) are now effective. While a legal challenge to the changes remains pending, any revisions or recissions by a federal court or the Trump Administration’s Federal Trade Commission (FTC) or Antitrust Division (DOJ) leadership have not stopped today’s implementation.

As such, parties to all M&A transactions that require an HSR Act filing must use the new notification forms, which (as we have previously described here) require the submission of substantially more information and documents. Parties should be prepared to spend additional time and to incur increased costs associated with HSR Act compliance. Cooperation provisions in M&A agreements will require adjustment to account for the additional preparation time. 

Key takeaways

  • Different Forms—There are different HSR forms for the buy- and sell-side. 
  • Transaction Rationale—Parties must “describe all strategic rationales for the transaction.”
  • Documents Prepared in the “Ordinary Course” of Business—Parties have to submit certain plans and reports created within one year prior to the HSR filing that were shared with the CEO or any board member if the document addresses competition, competitors, markets, or market shares relating to a product or service that the counterparty also sells or plans to sell. 
  • Drafts of Transaction-Specific Documents—Parties must submit draft documents shared with a board member if they were prepared (a) “for the purpose of evaluating or analyzing the acquisition with respect to market shares, competition, competitors, markets, potential for sales growth, or expansion;” and (b) by or for an officer or director or a “supervisory deal team lead.” Previously, such draft documents were captured only if they had been provided to the entire board of directors.
  • Overlapping Business and Top 10 Customers—Parties must provide details of any actual or potential competitive overlaps and identify top customers by name. 
  • Prior Acquisitions—Both notifying parties—not just the buyer—must provide details on acquisitions involving overlapping products/services during the preceding five years.

Conclusion

Absent some action from Congress (e.g., under the Congressional Review Act), the FTC, or a federal court—none of which seems likely to happen soon—parties to M&A transactions triggering an HSR Act filing obligation will need to comply with these onerous changes for the foreseeable future. The Baker McKenzie antitrust team is available to answer your questions and guide your teams on how best to comply with these new burdens in the most efficient and effective manner.

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Brian Burke is a partner in Baker McKenzie's Washington, DC office. He draws on over 20 years of experience to counsel clients on all federal antitrust issues. He assists clients in successfully navigating the merger clearance process before the US as well as international antitrust authorities. Brian also has extensive experience advising clients on civil and criminal governmental antitrust investigations, commercial antitrust litigation, antitrust compliance programs, risk assessments, and pricing and distribution policies. Brian holds multiple leadership positions in the Firm. He is a member of the Steering Committee for the Firm's North American Antitrust Practice Group, as well of the Global Antitrust and Competition Taskforces for Healthcare, Energy Mining and Infrastructure, and Consumer Goods Industries. He also serves as the co-head of the Firm's Merger-Control Task Force.

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Mark H. Hamer is Global Chair of the Firm's Antitrust & Competition Practice Group, comprised of over 250 competition lawyers in 60 offices across 43 countries. Before 2020, he served as its North America Chair.
Mark's practice spans across all types of antitrust matters, from high-stakes litigation to strategic merger clearance to bet-the-company criminal and civil investigations. Before joining Baker McKenzie, Mark served as a trial attorney in the Antitrust Division of the US Department of Justice, where he was involved in some of the DOJ's highest-profile antitrust trials.

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Creighton Macy is the Chair of Baker McKenzie's North America Antitrust & Competition Practice Group. Creighton is recognized as a leading global antitrust practitioner.

Creighton has extensive experience representing clients in a wide variety of antitrust matters, including mergers and acquisitions, investigations by the United States Department of Justice and the Federal Trade Commission, private litigation, and counselling on issues such as antitrust compliance. Before joining the Firm, Creighton served as Chief of Staff and Senior Counsel in the DOJ Antitrust Division, working as a senior advisor to the Assistant Attorney General on civil and criminal antitrust enforcement and policy matters, as well as budget and personnel issues. During Creighton's time at the DOJ, the Antitrust Division undertook an unprecedented volume of high-profile civil and criminal matters.

Creighton began his career as a Trial Attorney in the Litigation III and Transportation, Energy, and Agriculture sections of the Antitrust Division, working on a number of notable merger and civil non-merger investigations and cases. Before rejoining the Antitrust Division as its Chief of Staff, he was a member of another global law firm's antitrust practice, where he advised clients on a wide range of US and international antitrust issues.

Creighton is consistently recognized globally for his market-leading antitrust practice with respect to high-stakes transactions, investigations, and compliance and counseling work. For example, clients have noted that Creighton “shines above the rest’ due to his first-rate cartel and merger control-related practice.’” He also regularly speaks and publishes articles relating to a variety of antitrust issues, and has been recognized many times for his contributions and thought-leadership on these issues.

Creighton is currently Co-Chair of the American Bar Association Antitrust Law Section’s Young Lawyers Task Force. In previous roles, he served as Reporter of the Presidential Transition Task Force, as well as Chair of the Trade, Sports, and Professional Associations Committee. He is highly involved in mentoring programs, including with the Antitrust Law Section, as well as Marquette University Law School, where he previously served as the DC Representative of the Alumni Board.

Creighton graduated from Marquette University, where he was an NCAA Division I Academic All-American tennis player. During his time at Marquette, he was awarded the Athletic Department’s Cura Personalis award by his peers, as well as several leadership awards. More recently, Creighton was named the Athletic Department’s Young Alumnus of the Year Award.

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John Fedele is a member of Baker McKenzie's antitrust practice and is located in its Washington, DC office. While he has a broad range of antitrust experience, he most frequently represents clients before the Antitrust Division of the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) in investigations of proposed mergers and acquisitions, and routinely analyzes and manages filing obligations under the Hart-Scott-Rodino (HSR) Act and foreign competition regimes. John is a member of the Washington D.C. office’s Diversity Advisory Committee, serves as a contact in the firm’s PointONE program designed to allow employees to raise workplace concerns in a safe space, and maintains an active pro bono practice. He also is a member of Baker McKenzie’s Global Merger Control Task Force.

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Teisha Johnson is a member of Baker McKenzie's antitrust practice in Washington, DC. She advises clients on a wide range of antitrust and e-discovery matters, and has considerable experience counseling clients in government investigations, proposed mergers and acquisitions, compliance, and litigation matters.

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