August 4, 2021
HSR Filings: The FTC’s Overwhelmed & You’re On Your Own
The HSR Act generally provides a 30-day period for review of a pending merger transaction by the FTC & DOJ. While post-closing challenges do occur from time to time, the expiration of the HSR waiting period without receipt of a second request is usually taken as a sign that the deal doesn’t raise antitrust concerns. However, the FTC’s Bureau of Competition blogged yesterday that the agency is so swamped with HSR filings that it isn’t able to complete its review of many transactions within that 30-day period. If the agency hasn’t completed its review, then this excerpt says that you move forward with your deal at your own risk:
This year, the FTC has been hit by a tidal wave of merger filings that is straining the agency’s capacity to rigorously investigate deals ahead of the statutory deadlines. (We now post our monthly HSR figures on the website and they are astounding.) We believe it is important to be upfront about these capacity constraints. For deals that we cannot fully investigate within the requisite timelines, we have begun to send standard form letters alerting companies that the FTC’s investigation remains open and reminding companies that the agency may subsequently determine that the deal was unlawful.
Companies that choose to proceed with transactions that have not been fully investigated are doing so at their own risk. Of course, this action should not be construed as a determination that the deal is unlawful, just as the fact that we have not issued such a letter with respect to an HSR filing should not be construed as a determination that a deal is lawful.
If your deal is one as to which the FTC’s investigation remains open when the waiting period expires, here’s the form letter you can expect to receive from the agency.
– John Jenkins