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FTC Issues New Guidance Requiring Foreign Market Documents in HSR Filings
Practical Law Legal Update w-004-7371 (Approx. 3 pages)
FTC Issues New Guidance Requiring Foreign Market Documents in HSR Filings
by Practical Law Antitrust
| Published on 28 Nov 2016 • USA (National/Federal) |
The Premerger Notification Office (PNO) of the Federal Trade Commission (FTC) recently changed its position regarding documents required in a Hart-Scott-Rodino (HSR) Act premerger filing. Specifically, regarding Items 4(c) and 4(d), filing parties may no longer exclude documents solely because they relate only to foreign markets.
Parties to a transaction that is reportable under the HSR Act must submit an HSR form, along with certain documents. Specifically, Item 4(c) seeks documents prepared by or for officers or directors in evaluating or analyzing the acquisition regarding:
- Market shares.
- Competition.
- Competitors.
- Markets.
- Potential for sales growth or expansion into product or geographic markets.
Item 4(d) seeks documents relating to the acquisition, including:
- Confidential information memoranda.
- Documents prepared by third party advisors.
- Documents evaluating or analyzing synergies.
Previously, the PNO issued informal guidance stating that filing parties did not need to submit documents that only discuss foreign markets in response to Items 4(c) and 4(d), even if they were otherwise responsive. However, effective immediately, the PNO has changed its position, and will require filing parties to submit all documents that relate to non-exempt portions of a transaction and are responsive to Items 4(c) and 4(d), even if those documents only discuss foreign markets.
Acknowledging the increasingly global marketplace, the PNO now believes that exclusion of these documents may impair the agencies' competitive impact analysis. The PNO has determined that documents that discuss foreign markets or competitors, even without a specific reference to the US market, may be relevant to the agencies' review.
Examples of documents that may be relevant to competition in the US market, even if they do not reference the US, include the following:
- In an acquisition of a manufacturer of a certain product, the location and capacity, including shares, of non-US manufacturers of that same product.
- In an acquisition by a non-US manufacturer that sells a product in the US of a non-US company developing a competing product, documents discussing the potential expansion beyond Europe of the market for the product in development.
The PNO will update its informal guidance and online tipsheet to reflect this change.