FTC Requires More Documents With Revised HSR Notification Form

The "4(c)" documents we have all come to know and love have now been joined by the new "4(d)" documents. As expected from the advance notice, the FTC and DOJ today reaffirmed the importance of key business documents to their analysis by making it official that an expanded set of such documents must be submitted along with the new revised HSR Notification and Report Form. Those and other changes to the form will be effective in about 30 days.

The revised HSR form creates several new disclosure obligations intended to assist the agency review process, while eliminating others the agencies determined are no longer necessary. The most significant revisions include:

• Production of Additional Documents. The revised form expands the list of documents parties must submit in connection with an HSR notification to include: (i) the "confidential information memorandum" or similar materials that relate to the acquired entity or assets; (ii) materials prepared by investment bankers, consultants, or other third-party advisors that evaluate or analyze the transaction's competitive effect; and (iii) documents that evaluate or analyze the synergies and/or efficiencies that would result from the transaction.
• Revised Revenue Reporting Obligations. While the revised form eliminates the requirement that parties provide historic revenue information (i.e., "base year" revenues), the parties must provide more detailed revenue information relating to current manufacturing operations (revenues by 10-digit NAICS codes), including revenues generated from the sale of foreign-manufactured goods in or into the U.S.
• Disclosure of "Associates". The revised form requires the acquiring person to disclose any entities that have the right to manage or are under common management with the acquiring person, but which are not under common "control" for HSR purposes. Examples of companies that may commonly trigger this requirement include investment funds, private equity firms, and other entities structured as a limited partnership. The new rules also impose substantial new information reporting requirements regarding such associates, including the provision of 6-digit NAICS code revenue data and geographic sales information.

The expanded document production obligations further reinforce the importance of making sure the internal and external M&A teams are fully aware of and sensitive to the fact that the antitrust agencies will be reading more of their documents as part of the transaction's initial assessment. And note that compliance with these changes, especially the new revenue reporting obligations and associated entity disclosures, may increase the time and effort required to compile your next HSR filing. These revisions will become effective thirty days after their publication in the Federal Register.

To read a full copy of the Commission's announcement, including all of the revisions, click here.