Publications July 2011

Hart-Scott-Rodino Changes Affect PremergerNotification in the U.S.

On July 7th, the Federal Trade Commission ('FTC') announced significant changes to the Hart-Scott-Rodino Premerger Notification and Report Form ('HSR Form'), which the parties to certain mergers, acquisitions and other transactions must file with the FTC and the Antitrust Division of the U.S. Department of Justice. The FTC also announced changes to the associated Hart-Scott-Rodino Premerger Notification Rules ('HSR Rules'). These changes will take effect in approximately 30 days. All the changes are described in the Federal Register Notice available at http://www.ftc.gov/opa/2011/07/hsrform.shtm. The most notable changes include:

  • Filing parties have always been required to list their affiliates, i.e., companies that they control. Now, acquiring persons will also have to identify, and provide some information concerning, their 'associates', i.e., any person that (1) has the right to manage the acquiring person directly or indirectly; (2) is directly or indirectly managed by the acquiring person; (3) directly or indirectly controls, is controlled by, or is under common control with a managing entity; or (4) directly or indirectly manages, is managed by, or is under common management with a managing entity.
  • Filing parties have always been required to file certain types of documents, i.e., all studies, surveys, analyses and reports which were prepared by or for any officer(s) or director(s) for the purpose of evaluating or analyzing the acquisition with respect to market shares, competition, competitors, markets, potential for sales growth or expansion into product or geographic markets. Now, parties will also have to file (1) all Confidential Information Memoranda, and documents with similar function, prepared within one year before the filing, that specifically relate to the sale of the acquired entity or assets; (2) all studies, surveys, analyses and reports prepared within one year before the filing by investment bankers, consultants or other third party advisors for any officer(s) or director(s) for the purpose of evaluating or analyzing market shares, competition, competitors, markets, potential for sales growth or expansion into product or geographic markets, that specifically relate to the sale of the acquired entity or assets; and (3) all studies, surveys, analyses and reports evaluating synergies and/or efficiencies prepared by or for any officer(s) or director(s) for the purpose of evaluating or analyzing the acquisition.
  • Filing parties no longer will be required to provide their revenues during any base year. They will continue to be required to provide their revenues during their most recent complete financial year, by 6-digit NAICS non-manufacturing industry code, and by 10-digit manufactured product code.

This summary is intended to be only an introduction to the changes announced today, and should not be used as the basis for determining whether HSR Forms must be filed in connection with any particular transaction, or what documents and information must be filed with any particular HSR Form. These determinations must be made on a case-by-case basis.

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