DealLawyers.com Blog

With the new, more burdensome HSR rules now in effect, a recent Fried Frank memo offers some advice about the new rules that buyers and sellers need to take into account when negotiating a merger agreement. Here’s the intro:

The new Hart-Scott-Rodino (“HSR”) Act rules1 took effect on February 10, 2025 and fundamentally changed the HSR filing process. While there are ongoing legal challenges to the new rules, both in court and in Congress, the new rules are currently in effect and transacting parties need to take them into account when negotiating merger agreements.

Specifically, parties should (1) consider how the new rules will impact HSR filing deadlines, (2) strengthen cooperation covenants to address who will lead HSR strategy and require pre-filing, privileged, exchange of draft HSR filings and documents, (3) analyze the impact of the new disclosure requirements before agreeing on antitrust risk-shifting covenants, (4) consider whether carveouts to confidentiality covenants are needed to allow parties to contact their customers prior to potential antitrust agency inquiries, and (5) ensure that LOI and term sheet filings sufficiently describe the material terms of the contemplated transaction.

Perhaps the most important advice offered by the memo is that in light of the additional time and burden of the new HSR filings, the parties should begin work on HSR filings earlier in the deal process, and that frequent buyers should work with counsel to prepare larger repositories of HSR-related information that can be leveraged when new filing obligations arise.

– John Jenkins