Changes to Merger Information Rules by the FTC

By Jody Godoy

(Reuters) – The U.S. Federal Trade Commission (FTC) finalized changes on Thursday to a rule that determines what information companies must provide when seeking clearance for proposed mergers, scaling back a proposal that faced criticism from industry groups.

Importance of the Development

The FTC views this change positively, believing it will enable quicker assessments of which deals require further investigation and which can proceed.

The updated rule mandates that companies provide additional information. Additionally, the FTC is considering resuming the practice of completing merger reviews before the 30-day waiting period expires, a procedure that was suspended in 2021.

Key Insight

"The information required by the Final Rule will mitigate the risk of false positives. It can reveal that a merger presents no competitive threat at all, and the Commission can avoid crawling down rabbit holes in unnecessary investigations," stated Andrew Ferguson, one of the FTC's two Republican commissioners.

Historical Context

• 46 years ago: Last significant overhaul of the rule.
• 5-0: Unanimous vote from two Republican and three Democratic commissioners in favor of the rule.

Industry Response

"While the Agencies have been rightly pressured to scale back their expensive, radical vision for overhauling the merger-notification process, this final rulemaking still holds the potential to unnecessarily target vertical mergers, private equity, and smaller acquisitions," commented Sean Heather, senior vice president for antitrust at the U.S. Chamber of Commerce, which criticized the earlier proposal.