First US M&A reforms in 45 years will crack down on illegal mergers but also delay deals by months

Revamp of the Hart-Scott-Rodino filing process by the Justice Department and the FTC will allow for more effective and efficient screening of deals

New filings would also require disclosure of subsidies such as grants and loans by certain foreign governments including North Korea, China, Russia, and Iran

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The Federal Trade Commission said the M&A rules revamp is intended to help preserve agency resources and cut down on the need to ask for more documents or information during the first 30 days. Photo: AP Photo

Published: 10:19am, 28 Jun 2023

The US antitrust agencies are requiring firms to turn over much more information about their transactions than before in an overhaul to merger rules that could delay deals by months.

The revamp of the so-called Hart-Scott-Rodino filing process, a move by the Justice Department and the Federal Trade Commission to crack down on illegal mergers, could add as much as two to three months to the timetable for deals, according to one estimate.

The agencies say the overhaul, the first in 45 years, will allow them to “more effectively and efficiently screen transactions” for antitrust concerns.

The proposed changes, released on Tuesday for publication in the Federal Register later this week, require details about acquisitions during the previous 10 years, information on company officers, directors and board observers, in addition to data on the firms’ workforce.

Overhaul of US merger rules by the Justice Department and the Federal Trade Commission could add as much as two to three months to the timetable for deals. Photo: Reuters

The agencies will take public comments on the proposed changes for 60 days. The new rules will not go into effect until after the FTC and DOJ publish a final version, which is expected to take several months to complete.