The Federal Trade Commission (FTC) and Department of Justice (DOJ) have proposed changes to the Hart-Scott-Rodino (HSR) Act that may radically alter the merger review process in the United States. In June, the FTC unveiled a proposal that will require parties to provide significantly more information and data in premerger filings, specifically:

1. Transaction Rationale: Parties would be required to identify and explain each strategic rationale for the transaction that was discussed or contemplated by the filing person or its employees and identify each document produced in the filing that confirms/discusses each rationale.

2. Competition Analysis: Parties would be required to provide narratives and sales and customer data about: a) areas of actual or potential competition between the parties, including licensing, noncompete or nonsolicitation agreements for overlapping products or services; and b) existing or potential supply agreements between the parties or with competitors. Parties must also disclose key customer and supplier contact information.

3. Additional Party Information: The proposal increases the amount of information required to be provided about the parties, including the structure and organization of filing entities, additional minority interest holders, board members and observers, and certain credit providers and managers. Parties would also be required to provide substantial information about prior acquisitions over the last 10 years.

4. Transaction-Related Documents: The proposal would expand the search for and production of 4(c)/4(d) documents beyond officers and directors to include supervisory deal team lead(s), and would require drafts in addition to final documents. The parties would also have to submit all ordinary course plans and reports that analyze market shares, competition, competitors, or markets for any current or planned overlapping product or service that were prepared or modified within a year of the filing.

5. Labor Market Information: The proposal requires each filing party to provide occupational and geographic information about its workers, classifying them based on pre-defined Bureau of Labor Statistics categories. Each party would list their five largest categories of workers by 6-digit a Standard Occupational Classification (SOC) code and provide the total number of employees for each code, allowing the FTC and DOJ to screen for any labor market effects from the transaction. Filers will be required to identify geographic overlaps of workers by category. Each filer would also have to identify any penalties or findings by the U.S. Department of Labor’s Wage and Hour Division, the National Labor Relations Board or the Occupational Safety and Health Administration during the prior five years.

6. Foreign Language Translations: The proposal requires verbatim English translations of all foreign-language documents submitted as a part of the filing.Currently, verbatim English translations are only required for documents submitted in response to a Second Request.