New HSR filing requirements poised to take effect

In November, we reported that the United States would be overhauling the antitrust-related Hart-Scott-Rodino (HSR) form and premerger filing process. While there has been speculation that the Trump Administration might postpone implementation, the new HSR form and associated rules are now poised to take effect for all HSR filings submitted after 5:00 P.M. Eastern Standard Time on Friday, February 7, 2025.

What you need to know

• The rules require non-definitive agreements to contain detailed deal terms that may not be practical for inclusion in non-binding LOIs or term sheets. The renewed availability of early termination of the HSR waiting period also reduces the benefits of filing on a non-definitive agreement.
• Transaction parties need to identify a “supervisory deal team lead” and submit transaction-related documents prepared by or for the team lead as part of their HSR filing.
• The new HSR form will require more detailed information concerning competitive overlaps between merging parties.

The new HSR form will require more time and effort

Parties to proposed M&A transactions should prepare now for new and additional HSR considerations and obligations, including:

• Whether to file on a non-definitive agreement such as a non-binding letter of intent (LOI). The new rules require non-definitive agreements to contain certain detailed deal terms that may not be practical for inclusion in an LOI or term sheet. The rules also restore early termination of the HSR waiting period, along with public disclosure. As such, parties will be less likely to request early termination under the new rules, meaning that the benefits of submitting an HSR filing on an LOI will be substantially reduced.
• Identifying a party’s “supervisory deal team lead”, meaning the individual with primary responsibility for supervising the strategic assessment of the deal and who does not otherwise qualify as a director or officer. Parties will now be required to submit documents prepared by or for the supervisory deal team lead 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—documents traditionally responsive to Item 4(c) or Item 4(d) of the HSR form. Parties must also still submit such documents prepared by or for directors and officers as historically required.
• Ascertaining the parties’ competing products and services, as well as inputs into competing products or services. The HSR form now will require a more detailed description of each competitive overlap, the most recent annual sales of each overlapping product, service or input, and a list of the top ten customers or suppliers (as the case may be) for each overlapping product, service or input.
• Collecting regularly prepared plans and reports provided to a party’s chief executive officer within the year preceding the HSR filing that contain customary Item 4(c) or Item 4(d) content or that pertain to any product or service also produced, sold, or known to be under development by the counterparty.
• Taking caution in providing directors with drafts of transaction-related documents because most such drafts must be submitted with the HSR filing even if a final version of the document exists.