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How the FTC's Final Rule on Merger Filings Puts Additional Burden on Companies

Analysis  |  By Jay Asser  
   October 14, 2024

The Hart-Scott-Rodino Act will be significantly amended for the first time in 46 years, requiring companies to provide more information.

The Federal Trade Commission (FTC) has finalized its rule altering the Hart-Scott-Rodino Act (HSR), putting more onus on merging parties.

The changes include requiring companies involved in M&A to disclose information about entities like private equity and minority holders that could influence decision-making post-merger, report vertical and non-horizontal business relationships, and inform the agency on acquisitions that closed with the last five years.

It marks the first time in 46 years that HSR has been overhauled after the program was passed in 1976.

The final rule, which was passed unanimously with a 5-0 vote by the commissioners, will take effect 90 days after it is published in the Federal Register, likely in January 2025.

“The new HSR Form marks a generational upgrade that will sharpen the antitrust agencies’ investigations and allow us to more effectively protect against mergers that may substantially lessen competition or tend to create a monopoly,” FTC Chair Lina Khan said in a statement.

The commission estimates the final rule will increase the time required to file an HSR filing by 68 hours on average and cost merger parties an additional $39,644 per filing on average. However, the commission said that it believes the costs will decline over time as companies get more familiar with the new requirements.

Alongside the changes to the final rule, the FTC stated it will resume its early termination of filings, which allow the agency to end the initial 30-day waiting period if it finds that the merging parties are complying with antitrust rules and don’t require enforcement.

Jay Asser is the CEO editor for HealthLeaders. 


KEY TAKEAWAYS

Healthcare companies seeking M&A will need to spend more time and money to give the FTC further information to comply with the premerger filing final rule requirements.

Overall, the final rule seeks to understand a wider scope of merging parties’ interests, acquisitions, and relationships to better enforce antitrust laws.

Companies should plan for the final rule to go into effect early 2025, assuming it isn’t delayed or challenged.

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