Previously published on June 26, 2012.
Keywords: HSR report, antitrust enforcement, mergers and acquisitions, FTC, DOJ
The latest update from the US federal antitrust enforcement agencies is in, and it shows that in fiscal year 2011, there was a significant increase in merger activities and continued aggressive antitrust enforcement by the Obama administration. Parties considering mergers and acquisitions should expect this aggressive enforcement policy to continue in 2012. In particular, the report shows:
A significant increase in Hart-Scott-Rodino (HSR) filings, continuing a trend from the low point in 2009 after the economic downturn; The Obama administration continues to investigate a higher percentage of mergers than did the previous administration; and As has been the case since 2009, once a full investigation is opened, there is a high likelihood that the investigation will result in the government challenging the transaction. On June 13, 2012, the Federal Trade Commission (FTC) and the Antitrust Division of the US Department of Justice (DOJ) published their Hart-Scott-Rodino Annual Report for the period of October 1, 2010 through September 30, 2011 (HSR Report). The report summarizes actions undertaken by the agencies with regard to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) during that period.
The report shows that the number of transactions reported pursuant to the HSR Act's premerger notification requirements continue to rebound from their 2009 lows. In fiscal year 2011, 1,450 transactions were reported, an increase of 24.4 percent from the 1,166 transactions reported in 2010, and a 102.5 percent increase from the 716 transactions reported in 2009. However, the number of transactions reported in fiscal year 2011 still marks a 51.8 percent decline from the 2,201 transactions reported in 2007, before the economic downturn.
The HSR Report also shows the increased antitrust scrutiny of mergers and acquisitions under the Obama administration. While most transactions reported under the HSR Act are cleared to move forward within the initial 30-day HSR waiting period, if either the FTC or the DOJ determines that further inquiry is necessary, either is authorized to issue a request for additional information and documents commonly referred to as a Ssecond request. In fiscal year 2011, of the 1,450 transactions reported under the HSR Act, the agencies issued a second request in 4.1 percent (58 transactions) of...