Biden Administration Enforcement Policy Creates Challenging Environment for U.S. Mergers

Jeff Jaeckel, Alex Okuliar, David Shaw, and Evan Harris authored an article for Global Competition Review discussing the competition-related merger review process in the United States.

“The statutory framework for suspensory merger review in the United States comes from the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the HSR Act),” the authors wrote. “Under the HSR Act, parties engaging in transactions that exceed certain annually adjusted monetary thresholds are required to notify both the Department of Justice (DOJ) and the Federal Trade Commission (FTC) (collectively, the agencies) at least 30 days prior to closing and pay a fee based on the size of the transaction. Failure to file can result in penalties in excess of $50,000 per day. At the end of the 30 days, known as the ‘waiting period,’ the parties are free to close unless (i) the parties ‘pull and refile’ to provide the agencies a fresh 30 days to review the transaction, or (ii) either of the agencies ‘require[s] the submission of additional information or documentary material relevant to the proposed acquisition’ (commonly called a second request). If a second request is issued, the parties cannot close until 30 days after substantially complying. The time it takes to comply with a second request depends on a number of factors, but it is typical for parties to take between two and a half and nine months to comply with the second request.”

Read the full article (subscription required).