Healthcare companies attempting to merge will have to disclose more information about the transaction under a new Federal Trade Commission proposal that could slow healthcare deals.
The antitrust agency voted Tuesday to publish a proposed rule that would require merging parties to disclose any minority investors in an effort to rule out any conflicts of interest; information about prior acquisitions; supplier agreements; subsidies from foreign entities; and workforce data, which includes information on executives and board members. The FTC estimates that the requirements will add an average of 107 hours to the current average time of 37 hours it takes to prepare a merger filing.
Additional details on the transaction may provide the agency with more opportunities to challenge the merger proposals. It could also speed up merger review if the expanded notification requirements limit the FTC’s subsequent information requests.
If approved, the change would be the first update to the Hart-Scott-Rodino Act pre-merger notification program in 45 years. The proposed rule will be published in the Federal Register later this week, and there will be a 60-day comment period before the rule is finalized — a process that will likely take months.
“Transactions are becoming increasingly complex, both in terms of deal structure and potential competitive impact. Along with major changes in the way companies do business, the instruments of investment have also changed. [Hart-Scott-Rodino] Meanwhile, the form has remained largely the same,” FTC Chairwoman Leena Khan and commissioners Rebecca Kelly Slaughter and Alvaro Bedoya said in a joint statement Tuesday.
part of the offer Federal government’s effort to stop anti-competitive mergers and acquisitions. FTC process underway Updating its Merger GuidelinesThat would take into account, among other issues, the worker-specific effects of the transaction.
the agency has Several major hospital transactions challenged In the past two years, each proposal was rejected.
Whether or not the FTC formally intervenes, the delay could scuttle merger efforts. For example, Cottage Health and Sansom Clinic in Santa Barbara, California canceled its proposed merger in 2017 After battling regulatory concerns for years. The longer it takes to go from letter of intent to closing, the higher the expenses for the merging parties, potentially reducing the value of the transaction.