FTC Resources for Reporters
How Mergers are Reviewed
Among the key provisions in U.S. antitrust law is one designed to prevent anticompetitive mergers or acquisitions. Under the Hart-Scott-Rodino Act, the FTC and the Department of Justice review most of the proposed transactions that affect commerce in the United States and are over a certain size, and either agency can take legal action to block deals that it believes would “substantially lessen competition.” Although there are some exemptions, for the most part current law requires companies to report any deal that is valued at more than $66 million to the agencies so they can be reviewed.
After the companies report a proposed deal, the agencies will do a preliminary review to determine whether it raises any antitrust concerns that warrant closer examination. Because the FTC and the Department of Justice share jurisdiction over merger review, transactions requiring further review are assigned to one agency on a case-by-case basis depending on which agency has more expertise with the industry involved. During the preliminary review, the parties must wait 30 days (15 days in the case of a cash tender or bankruptcy transaction) before closing their deal. Based on what the agency finds, it can: 1) terminate the waiting period and allow the parties to consummate their transaction (this action often is referred to as an “early termination”); 2) let the waiting period to expire, which allows the parties to consummate the transaction; or 3) if the initial review has raised competition issues, the agency may extend the review and ask the parties to turn over more information so it can take a closer look at how the transaction will affect competition (this action often is referred to as a “second request.”).
The vast majority of deals reviewed by the FTC and the Department of Justice are allowed to proceed after the first, preliminary review.
However, if a second request is issued, the companies must provide more information. Once the parties have certified that they have substantially complied with the request, the Commission has 30 additional days (10 days in the case of a cash tender or bankruptcy transaction) to complete its review of the transaction and to take action if necessary. The agency may decide at this point to: 1) close the investigation; 2) enter into a settlement with the companies; 3) take legal action in federal district court or through the FTC’s administrative process to block the deal from going forward.
News Releases:
- Biglari Holdings, Inc., to Pay $850,000 Penalty to Resolve FTC Allegations That it Violated U.S. Premerger Notification Requirements - 09/25/2012
- FTC Seeks Public Comments on Proposed Amendments to the Premerger Notification Rules Related to the Transfer of Exclusive Patent Rights in the Pharmaceutical Industry - 08/13/2012
- FTC Withdraws Agency's Policy Statement on Monetary Remedies in Competition Cases; Will Rely on Existing Law - 07/31/2012
- FTC Announces Revised Thresholds for Clayton Act Antitrust Reviews - 01/24/2012
- FTC Obtains $500,000 Penalty For Pre-Merger Reporting Act Violations - 12/16/2011
- FTC Challenges Graco Inc.'s Proposed Acquisition of Rival ITW Finishing LLC - 12/15/2011
- FTC Testifies Before House Judiciary Subcommittee on Agency's Work to Promote Competition and Benefit Consumers - 12/07/2011
- FTC Challenges OSF Healthcare System Proposed Acquisition of Rockford Health System as Anticompetitive - 11/18/2011
- United States and European Union Antitrust Agencies Issue Revised Best Practices for Coordinating Merger Reviews - 10/14/2011
- FTC Streamlines Approval Process for Minor Changes to Divestiture-Related Contracts - 7/26/2011
- FTC Puts Conditions on Perrigo’s Proposed Acquisition of Paddock Labs - 7/26/2011
- FTC Approves Final Order Settling Charges That Grifols, S.A.’s Acquisition of Talecris Biotherapeutics Holding Corp. Was Anticompetitive - 7/22/2011
- FTC Settles Charges That Cardinal Health’s Purchase of Biotech Was Anticompetitive - 7/21/2011
- Administrative Law Judge Concludes That North Carolina Dental Board Illegally Blocked Non-Dentists from Providing Teeth Whitening Services - 7/19/2011
- FTC Approves Final Order Settling Charges That Irving Oil’s Acquisition of ExxonMobil Assets in Maine Was Anticompetitive; FTC Approves Final Order Settling Charges of Anticompetitive Conduct Against Southwest Health Alliances, Inc. - 7/15/2011
- FTC, DOJ Announce Changes to Streamline the Premerger Notification Form - 7/7/2011
- FTC Approves Tops Markets' Application to Divest Three Former Penn Traffic Supermarkets in New York and Pennsylvania, Finalizes Modified Settlement Order - 7/5/2011
- FTC Approves Simon Property Group's Request to Divest Prime Outlets in Jeffersonville, Ohio, to Tanger Properties Limited Partnership - 6/28/2011
- FTC Seeks Public Comment on ConocoPhillips' Application to Modify Final Commission Order and to Approve Amended Licensing Agreements with Holly Corp. - 6/27/2011
- FTC Denies Dow Chemical's Application to Modify its 2009 Consent Order Requiring Sale of Chemicals Facility in California - 6/15/2011
- FTC Approves Universal Health Services' and Psychiatric Solutions' Application to Sell the Delaware Behavioral Health Assets - 6/7/2011
- FTC Approves Final Order Settling Charges that Hikma Pharmaceuticals PLC's Acquisition of Baxter Healthcare Assets was Anticompetitive - 6/7/2011
- FTC Seeks Public Comment on Universal Health Services Application to Sell Las Vegas Psychiatric Facilities - 6/3/2011
- FTC Challenges Grifols/Talecris Merger as Anticompetitive - 6/1/2011
- FTC Conditions Irving Oil’s Proposed Acquisition of ExxonMobil Assets in Maine - 5/26/2011
- FTC Requires Hikma to Sell Two Drugs as Condition of Baxter Healthcare Acquisition - 4/27/2011
- FTC and Georgia Attorney General Challenge Phoebe Putney Health System’s Proposed Acquisition of Palmyra Park Hospital as Anticompetitive- 4/20/2011
- FTC and Ohio Attorney General Challenge ProMedica's Acquisition of St. Luke's Hospital- 1/6/2011
- FTC Puts Conditions on Keystone's $245 Million Purchase of Compagnie de Saint-Gobain’s Advanced Ceramics Business- 12/29/2010
- FTC Puts Conditions on Simon Property Group’s Acquisition of Prime Outlets- 11/10/2010
Federal Trade Commission and U.S. Department of Justice Issue Revised Horizontal Merger Guidelines - 8/19/2010 - Dun & Bradstreet Settles FTC Charges that 2009 Acquisition was Anticompetitive - 9/10/2010
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