SEC Propose Amendments to Acquisitions and Dispositions Disclosures
The Securities and Exchange Commission (SEC) has proposed amendments and improvements to disclosure rules relating to mergers and acquisitions (and the sale of business assets) and is now seeking comments.
The amendments seek to balance the need to provide investors with the information they need to effectively understand the impact of significant acquisitions or disposals with the need to reduce the complexity and cost of this kind of disclosure.
Proposed amendments include a number of changes that seek to reduce the complexity of existing rules, and ensure there is better alignment between different types of businesses.
Anyone glancing at the financial press across the world at present would have more than a passing familiarity with the fact that M&A activity often leads to more efficient and more profitable companies. Sadly, almost as frequently, M&A can lead to a sharp fall in overall enterprise value as promised synergies fail to come about. Reviewing what gets disclosed seems sensible. Healthy scepticism might be a useful tool for the US regulator, or indeed any other policy maker considering this question.
Comments on the proposed changes are welcome for the next 60 days or so. Read more here.