Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Mergers reported under HSR Act down 7% in FY 2013, (May 21, 2014)

By Greg Hammond, J.D.

The number of mergers reported under the Hart-Scott-Rodino (HSR) Premerger Notification Program between October 1, 2012 and September 30, 2013 decreased approximately 7.2% from the previous fiscal year, according to the 36th Hart-Scott-Rodino Annual Report for fiscal year 2013, issued today by the FTC and Department of Justice Antitrust Division. The HSR Premerger Notification Program alerts agencies of transactions that could significantly lessen competition in violation of federal law.

Transactions. According to the report, there were 1,326 transactions reported to antitrust agencies in 2013, which is a notable decrease from the 1,429 transactions reported in FY 2012 and the 1,450 transactions reported in FY 2011. The number of transactions was broken down into percentages by industry group and included: Consumer Goods & Services (27.8 percent); Manufacturing (16.3 percent); Other (15.3 percent); Information Technology (9.3 percent); Banking & Insurance (9 percent); Energy & Natural Resources (8.3 percent); Chemicals & Pharmaceuticals (6.1 percent); Health Services (5.5 percent); and Transportation (2.4 percent).

Enforcement actions. In FY 2013, the Commission brought 23 merger enforcement actions, including 16 in which the Commission accepted consent orders for public comments. All 16 resulted in final orders—four in which administrative litigation was initiated; one in which the transaction was restructured; one in which the transaction was abandoned; and one in which a permanent injunction proceeding was initiated by the Commission.

The Antitrust Division challenged 15 merger transactions that it believed would have substantially lessened competition. Seven of the challenges were brought to U.S. district court, of which only one was fully litigated and the court found in favor of the government. The remaining eight challenges that were not litigated involved three cases where the proposed transaction was abandoned; three cases where the proposed transaction was restructured; and two cases where the parties changed their conduct to prevent competitive issues, alleviating the Division’s anticompetitive concerns.

Early termination. The rate of requests for early termination of the waiting period varied slightly between FY 2012 and FY 2013. Early termination requests decreased one percent from 78 percent of transactions reported in FY 2012 to 77 percent of transactions reported in FY 2013. In addition, the percentage of requests granted decreased slightly from 82 percent in FY 2012 to 80.4 percent in FY 2013.

New developments. The Commission discussed new developments within the Premerger Program, noting that it amended the premerger notification rules in 2013 to provide processes for: (1) withdrawing and resubmitting a premerger notification filing under the HSR Act and (2) determining when a transfer of rights in the pharmaceutical and medicine manufacturing industry creates an asset acquisition that may be reportable under the HSR Act. Both the Commission and the Antitrust Division continued their efforts to monitor compliance with the Premerger Notification Program’s filing and waiting period requirements. During FY 2013, the agencies brought two enforcement actions for violations of the filing and waiting period requirements, resulting in $1.2 million in civil penalties. The Commission also published a notice in 2013, increasing the transaction threshold from $68.2 million to $70.9 million, pursuant the 2000 amendments to the HSR Act.

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