January 3, 2018

HSR: FTC Says “All Documents” Means Side Agreements Too

This Orrick blog notes that the FTC recently issued new guidance concerning the filing requirements under Item 3(b) of the HSR Form – which requires parties to file copies of all agreements relating to the transaction. Apparently, the FTC has found that some parties had been withholding relevant side agreements on the theory that they were ancillary to the main agreement or protected by privilege.

The blog says that the FTC doesn’t see things that way:

On December 20, 2017, the FTC issued additional guidance in connection with Item 3(b) of the HSR Form, which requests “copies of all documents that constitute the agreement(s) among the acquiring person(s) and the person(s) whose assets, voting securities or non-corporate interests are to be acquired.” The FTC’s post clarifies that “all” really does mean all:

[A]ny agreement entered by the parties or their representatives that bears on the terms of the transaction and is binding on the parties must be submitted as part of the HSR filing. This includes any agreement that alters the terms of the merger during the antitrust review process, regardless of where those commitments are written down. If there is an enforceable agreement that binds the parties to take actions related to antitrust clearance, it must be submitted as part of the HSR form. (Emphasis in original).

Nonbinding analyses & recommendations don’t have to be provided in response to Item 3(b) – although they may be responsive to other parts of the HSR Form. However, the agreements themselves must be provided – and the FTC says you can forget about work product or any other privilege claims.

John Jenkins