Biden Administration Scales Back New Merger Review Requirements, a Win for Corporate Law Firms
The Biden Administration’s decision to scale back new merger review requirements has been met with relief from corporate law firms, who argued that the changes would have added unnecessary costs to deals. The Justice Department announced on Wednesday that the finalized rule for the Hart-Scott-Rodino filing notification program will place smaller burdens on merging parties, resulting in fewer disclosure requirements.
This decision comes after strong opposition from law firms such as Wachtell, Lipton, Rosen & Katz, Dechert, Foley & Lardner, and Axinn Veltrop & Harkrider, as well as business groups. Michael Keeley, the antitrust practice leader at Axinn, stated, “A win for clients is a win for us. Companies don’t have unlimited budgets for transactions.”
The initial proposal aimed to increase disclosures on various aspects of mergers, which would have added significant costs and delays to deals. The Chamber of Commerce estimated that the added costs could reach over $1 billion, with much of that money going to lawyers. Critics argued that the proposal would stretch capacity for companies and their counsel, especially smaller firms with fewer resources.
The finalized rule is expected to have “material differences” from the proposal, according to Andrew Forman, a deputy assistant attorney general in the DOJ’s antitrust division. While the full cost of complying with the new rule is still unclear, law firms may need to adjust their resources to meet the new requirements.
Despite the changes, opponents of the proposal may still challenge the rule in court. The Biden administration has been pushing for more stringent antitrust measures to address consolidation in the economy. The FTC and DOJ believe that additional disclosure requirements will help them more efficiently screen mergers and acquisitions, which have been increasing in frequency.
Overall, the decision to scale back the merger review requirements is seen as a positive development for corporate law firms and merging parties, who will now face fewer burdens and costs when seeking to complete deals.