The FTC and DOJ proposed sweeping changes to premerger notification requirements under the Hart-Scott-Rodino Act that would dramatically increase the information required for merger filings and significantly extend review timelines. The Council analyzed the proposals' implications for the ongoing consolidation wave in the commercial insurance brokerage sector. The changes would add substantial compliance costs and delays to M&A transactions for member firms.
On June 27, the Federal Trade Commission (FTC) released a Notice of Proposed Rulemaking that would very significantly expand the scope of information required for an initial premerger notification under the Hart-Scott-Rodino Antitrust Improvements Act (HSR).
The proposed modifications, if adopted, would require extensive information-gathering and analysis prior to filing a premerger notification. Even by the FTC’s likely conservative calculations, the changes would mean up to an additional 222 hours of preparation time per filing.
While the FTC’s interest in additional information at the outset of a transaction review is understandable, the magnitude of the additional work and associated costs that would be required to comply with the proposed rules may be disproportionate in light of the fact that antitrust enforcers issued Requests for Additional Information in only two percent of HSR filings and took enforcement action in less than one percent of notified transactions in the most recent fiscal year.
