CFOs’ heads are collectively spinning all across the country with the amount of change going on at a federal level. You need to stay on top of it, but it can be challenging to see through the sheer volume and identify which legislative and departmental changes are likely to impact your organization the most.
With M&A activity slowing in recent years, it’s an area that could easily have been put on the backburner. But according to Bain & Co, “2025 may finally be the year that the M&A market breaks through.” Combine that with the Federal Trade Commission’s (FTCs) significant updates to its merger review process, and it’s something that CFOs need to revisit.
The FTC’s new guidelines introduce some challenges for CFOs, finance executives, and M&A professionals. These changes increase data transparency requirements, lengthen review timelines, and impose stricter competition analyses, making financial due diligence and reporting more complex than ever.
For CFOs, these FTC changes mean a greater role in compliance and the need for deeper financial visibility, stronger scenario planning, and better integration of financial data across entities.
In this article, we’ll cover the new FTC rules, the main challenges they create, and how finance leaders can position their back office for efficient M&A.
Table of Contents
Understanding the FTC’s New Merger Rules
In October 2024, changes to the Hart-Scott-Rodino (HSR) rules were confirmed, which require companies to file with the FTC and Department of Justice (DOJ) before certain mergers or acquisitions can take place.
The FTC’s revised guidelines represent the most substantial change to US antitrust enforcement in decades, expanding reporting requirements and making many previously optional disclosures mandatory.
What does this mean for CFOs and finance teams who expect to be involved in this type of activity? Expect the time burden for filings to increase substantially.
According to the FTC, the time taken to complete a HSR filing is likely to more than double. And it’s not like M&A filings were exactly a light touch activity to begin with.
To limit the impact of this as a CFO, understand what the changes entail and how to position your team to maximize efficiency with gathering the required data.
Key Changes to HSR Filings
The short version is that companies will now need to provide more detailed financial disclosures, including details on debt structures, financial forecasts, and post-merger cash positions.
They must also now disclose complex ownership structures, including minority stakes, cross-shareholdings, and board interlocks for greater transparency as to where final control will lie. Stronger competition and market impact assessments will be needed as well. Merging entities will have to demonstrate how the deal will affect competition, as well as supply chains, and labor markets.
Some of the specific changes include:
Competitive Overlap and Supply Relationship Disclosures
Both the acquiring party (buyer) and the acquired party (seller/target) must now provide detailed disclosures on any competitive overlaps and supply chain relationships. This aims to provide a more detailed picture on the impact on the broader market, with a deeper level of transparency into competition in the industry and customer relationships.
Key disclosures now required include:
- Any current or planned products or services that directly compete with the other party’s offerings.
- The most recent year’s sales figures for any products or services that overlap between the merging entities.
- A detailed breakdown of customer categories that purchase overlapping products or services, along with a list of the top 10 customers (by units and sales) from the most recent year. This also includes the top 10 customers for each customer category associated with overlapping offerings.
- Specific revenue figures must be provided for these supply relationships, along with a list of the top 10 customers that rely on these products as inputs to compete with the other merging entity.
- Products in development that could potentially compete with the other party’s offerings, as well as any geographic overlaps between the two businesses.
Importantly, these disclosures are not limited to US operations and companies must include global data where applicable.
Ownership Structure Disclosure Requirements with PE Under the Microscope
Many of these changes are designed to increase the level of scrutiny on PE involvement in transactions. Given the often complex nature of their ownership structures and investment positions, it makes sense from a regulatory perspective to look for greater transparency to better assess potential antitrust issues.
The new requirements mandate detailed disclosures on a private equity sponsor’s ownership structure, affiliations, and investment relationships.
Previously, PE firms could limit disclosures to the acquiring entity itself, but under the new rules, have to provide:
- Organizational charts outlining relationships between the acquiring entity, its affiliates, and associated investment funds
- Details on intercompany transactions between affiliated businesses and portfolio companies
- Expanded reporting on competitive overlaps across the sponsor’s portfolio, rather than just the immediate acquisition target
This last point in particular is going to require far more detailed reporting than was previously required. Compounding this is the new requirement for detailed disclosures on minority shareholders and entities and funds that hold stakes in either company indirectly.
Submission of CEO-Reviewed Plans and Reports
Of particular note for CFOs and finance teams is the new requirement for the disclosure of all regularly prepared plans and reports that meet the following criteria:
- Dated within one year of the HSR filing
- Provided to the CEO, and
- Analyze competitive dynamics, including market share, competition, key competitors, and industry trends related to any overlapping products or service
The FTC has clarified that “regularly prepared” documents refer to those created on an annual, semi-annual, or quarterly basis, but do not include reports produced on a weekly or monthly schedule. These requirements are intended to give regulators a more structured view of how merging entities assess competition within their industries.
Aspects of finance and treasury that could fall into this category include cash forecasting and scenario planning that includes any competitor analysis, so it will be important that this information is easily accessible if M&A activity is on the horizon.
Key Challenges CFOs Face Under the New FTC Rules
As we’ve touched on, these new rules mean broader and more detailed financial data will be needed earlier in the transaction process, putting a greater onus on the CFO and their office from the outset.
It boils down to a few key areas:
1. Increased Financial Data Disclosure Requirements
Mergers now require more granular reporting on capital and debt structures. Regulators want a clearer picture of how deals will be financed, and CFOs will need to provide more detailed forecasts and reports to meet this obligation.
Post-merger liquidity is also now a key focus, moving forward-looking cash flow forecasts to the forefront. Without a platform like Trovata, this could become a major headache and time suck, not to mention the obvious challenge of maintaining accuracy using simple forecast tools like spreadsheets.
Investment and ownership relationships must now be clearer, including minority stakes, private equity involvement, and offshore holdings. This means going deeper into the financial relationships between all the related parties and reporting on this data effectively.
For CFOs, this creates the need to aggregate, normalize, and reconcile financial data across multiple banking and financial systems, for M&A transactions that may not even end up proceeding.
Suggested Reading: The CFO’s Role in Digital Transformation: Unlock ROI
2. Stricter Competition and Market Impact Analysis
The FTC is broadening its definition of anti-competitive behavior, requiring CFOs to provide evidence of how a deal will impact industry competition, particularly in tech, healthcare, and finance.
Specifically, they want to know how a deal could affect suppliers and customers and influence labor markets. To be able to answer those questions, CFOs and treasurers need to have access to the data.
Without the right tool like Trovata to automate and simplify this type of reporting, finance teams could easily become bogged down in manual transactions searches and data consolidation.
For example, finding and disclosing the transaction history and contract values for all of your existing vendors could be a mammoth undertaking if needing to be done manually.
3. Extended Review Timelines and Deal Uncertainty
Mergers are now subject to longer review periods, increasing the financial risks of deal delays. In essence, it reduces the margin for error in managing the financial impact of a pending transaction.
CFOs and Treasurers, more than ever, need to be able to manage cash reserves to account for potential delays in deal closure, and maintain financial flexibility and real-time liquidity tracking to avoid disruptions in operations.
That increased deal uncertainty also means a bigger chance that deals will fall through, subsequently increasing the risk of wasted time. All the more reason to be as efficient as possible through the disclosure process.
Best Practices for CFOs to Navigate the New Rules
So, with all those challenges in mind, how should CFOs approach dealing with them? As with so much in modern finance and treasury, it comes down primarily to better data management and control. To do that, processes, workflows and systems should be centered around simplification.
“The strong consensus today is that simplification, for many companies across regions, is an enabler of value creation because of the benefits of management focus [and] incentivization.”
– David Dubner Global Head of M&A Structuring at Goldman Sachs
Improve Data Transparency
The more transparent and accessible your financial data is, the less work it’s going to be to unearth it during the filing process. CFOs should be focusing on improving real-time access to financial data anyway, and the new HSR rules are just another reason why.
One key addition these changes do highlight is the need to get granular across subsidiaries and banking relationships. Ideally, finance teams should have access to centralized financial reporting in a single, real-time platform, automated data reconciliation, and standardized transaction tagging to categorize financial activity by geography, business unit, or regulatory need.
Embed Proactive Scenario Planning and Forecasting Practices
Again, the key to simplifying any due diligence is to embed the data management and analysis practices into your existing workflow. It then becomes a matter of just tweaking or narrowing the information you already have, rather than starting from scratch.
Financial forecasts are a great example. By building detailed ‘what-if’ scenarios, reviewing alternative financing structures and highlighting potential areas needing cost reduction, creating forecasts on the basis of a transaction becomes just an iterative process, rather than a new one.
Enhance Cross-Departmental Collaboration
Operating in silos is a sure-fire way to make any process less efficient and more time-consuming. CFOs should work closely with legal, treasury, and corporate development teams to align on their compliance strategy.
Establishing a finance-driven M&A task force can help to integrate regulatory, liquidity, and reporting workflows in a consistent manner, while working from a single source of financial truth to avoid discrepancies in regulatory filings.
Prioritize Real-Time Cash Management
Deals are going to take longer. That means companies need better liquidity planning to weather extended deal timelines. CFOs and Treasurers need to ensure they’re optimizing cash reserves, monitoring debt and interest rate exposures and automating cash tracking across all banking partners to improve visibility and control.
Turn FTC Compliance into a Competitive Strength
The FTC’s new rules signal a more complex and demanding era for corporate M&A. That might sound like bad news, but actually, it represents an opportunity. The bar is going to rise, meaning that CFOs who proactively adapt to these changes can turn compliance into a competitive advantage.
Organizations who are able to move quickly and efficiently will make better M&A decisions and be able to act on them faster. That’s particularly important given that M&A is looking to become a higher priority in growth plans than it has in recent years.
For CFOs, the FTC’s merger rule changes are going to require a new level of financial discipline and strategic foresight. Instead of seeing these changes as a burden, use them as an opportunity to improve financial visibility and lean into data-driven decision-making.
Finance and treasury teams who embrace automation, real-time reporting, and proactive scenario planning will be best positioned to execute successful deals in the years ahead.
To see how Trovata can help your finance and treasury teams access, analyze, report and forecast on your data like never before, watch a demo recording or schedule a live demo today.
