America’s New Merger Rules Could Add Months to Process

Proposed regulations for mergers and acquisitions could add months to the deals process.

That’s according to antitrust lawyer Kara Kuritz, who spoke with Seeking Alpha on Sunday (July 9) about the Federal Trade Commission (FTC) and the Department of Justice’s (DOJ) proposed revisions to the Hart-Scott-Rodino (HSR) filing process. 

The revisions, the first in the process’s 45-year history, would make companies and investment firms submit additional information that the regulators hadn’t requested before.

Kuritz told the website that it typically takes a week or two to prepare an HSR filing, while the new rules could add months to that process.

“The proposed rules would make it particularly difficult for large investment funds to comply,” said Kuritz, a one-time HSR Act specialist at the DOJ’s antitrust division. “I expect most of the additional time will be on the front end, before the filing ever can be submitted to the agencies.”

According to the report, the DOJ and FTC will ask companies about transaction rationale and details about investment vehicles or corporate relationships, and about products and services and details about things like supply agreements.

“Now the agencies are proposing that such information be provided in all reportable deals, so it imposes a significant burden for deals that are unlikely to raise any competition concerns,” Kuritz told Seeking Alpha.

As PYMNTS wrote last week, Lina Khan, FTC chair, has said that “much has changed” since the HSR was first introduced, including the increased complexity and volume of mergers. 

“The information currently collected by the HSR form is insufficient for our teams to determine, in the initial 30 days, whether a proposed deal may violate the antitrust laws,” she said.

The changes are happening at a time when deals are increasingly hard to fund. As noted here in late March, worldwide global mergers and acquisitions (M&A) volumes fell by 48% year over year in the first quarter of this year, reaching their lowest level in more than a decade.

That drop was down to a variety of factors, among them climbing interest rates, high inflation, worldwide geopolitical tensions, concerns about a recession and the recent banking crisis.

The turmoil around the Silicon Valley Bank/Signature Bank failures in the U.S. and the Credit Suisse crisis in Europe led many companies to put a halt on in-progress deals due to concerns about widespread uncertainty as they looked for funding.