In 1976, Congress enacted the Hart-Scott-Rodino Act (HSR). Under the HSR merger review process, parties to transactions above certain thresholds must provide advance notice to the Federal Trade Commission (FTC) and the Department of Justice (DOJ) and may not complete the transaction until expiration of the statutory waiting period.
The FTC and DOJ retain jurisdiction to review transactions before or after closing, regardless of whether an HSR waiting period has expired—though historically, the FTC and DOJ rarely have investigated transactions after allowing the HSR waiting period to expire. The FTC has upended the review process with its recent practice of issuing warning letters with respect to transactions that have been through HSR review. The practice coincides with an unprecedented merger wave of 4,130 acquisitions filed with the agencies in 2021, reportedly straining the FTC’s resources.
The warning letters are part of several new tactics that are causing further delay and uncertainty in merger review and clearance. This article discusses those tactics and their immediate impact. The general approach has been a doubling down on enforcement, stripping away of exemptions and interpretations, and more burdensome investigations with less predictable outcomes.
Reproduced with permission. Published August 2022. Copyright 2022 The Bureau of National Affairs, Inc. 800-372-1033. For further use, please visit http://www.bna.com/copyright-permission-request/