FTC Introduces Merger Review Process Reforms

On February 16, 2006, U.S. Federal Trade Commission (FTC) Chairman Deborah Platt Majoras announced several reforms to the agency’s merger review process, which have the potential to significantly reduce the time and costs involved in obtaining merger clearance from the FTC. The reforms, which address the process for administering "second requests" under the Hart-Scott-Rodino (HSR) Premerger Notification Act, are the product of a year-long review by the FTC’s Merger Process Task Force.

The primary goals of the reforms are to reduce the cost to parties of complying with second requests, the cost to the agency to review the proposed merger and the time required to complete a merger investigation. Today, to comply with a second request, merging parties will pay on average approximately $5 million or more, and the agency’s merger review might take as long as a year to complete, which delays the proposed transaction in the interim. For entities contemplating transactions with substantive