The Federal Trade Commission and Department of Justice are seeking comment on a couple of proposed changes to the automatic Hart Scott Rodino (HSR) antitrust reviews, which are required of large mergers (ones valued at at least $94 million).
The FTC and DOJ divide up antitrust reviews, with DOJ generally handling the media merger reviews.
The agencies are proposing to change the definition of the acquiring company to include "associates." It is a way to capture the changes in the financial structure of acquiring entities by expanding the definition to capture "all entities a parent entity controls directly or indirectly and "all associates of the ultimate parent entity.
Currently the rules do not require disclosure of substantive information about the complete structure of the acquiring entities like limited partnerships and limited liability companies. Now the FTC will get info on the entire family of funds because treating them as separate entities "is often at odds with the realities of how fund families and MLPs are managed."
The FTC, which has long contemplated exempting the acquisition of 10% or less of the voting securities in a company, wants to finally add that exemption to HRS reporting requirements.
But there are exemptions from the exemption. It would not be available to an acquiring company in a vertical relationship with the acquired valued at more than $10 million. "There can be important competitive implications in vertical relationships, and the Agencies have a strong interest in reviewing transactions that create or expand vertical relationships," the FTC said. It would also not apply if the acquiring entity is a competitor to the company it is acquiring, or even has more than a 1% stake in a competitor.
Separately, the FTC is looking at whether the HSR review needs to be further modified, including perhaps lowering the $94 million threshold for triggering an HSR review to better capture smaller Big Tech mergers that wind up having large impacts.
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