03.11.2011

|

Updates

On February 15, 2011, the Federal Trade Commission and the Department of Justice published their Hart-Scott-Rodino Annual Report for Fiscal Year 2010 for the period from October 1, 2009 to September 30, 2010.  The Annual Report summarizes Federal Trade Commission and Department of Justice actions conducted under the Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act, in fiscal year 2010.  The number of filings in fiscal 2010 increased by 63% over the number of filings in 2009, after two consecutive years in which the number of filings reported to the agencies had declined.

This Update provides key highlights of the Annual Report and offers practical advice.

The Annual Report Shows a Slight Decrease in Investigations

In fiscal 2010, 1,166 transactions were reported under the HSR Act, a 63% increase from the 716 transactions reported in fiscal 2009.  The Federal Trade Commission or the Department of Justice investigated approximately 20% of those 1,166 transactions (compared to approximately 23% of the 716 transactions investigated in 2009).  Of the transactions investigated in fiscal 2010, about 21% resulted in the issuance of second requests (essentially the same percentage as in 2009).  And of those transactions that were issued second requests, 87% resulted in an abandoned or restructured deal, a consent decree requiring the parties to divest assets, or litigation in federal district court (compared to 100% in 2009). 

 

2006

2007 

2008 

 2009

2010 

Change
from 2009

Transactions Reported

1,768

2,201

1,726

716

1,166

63%

Investigated

17%

14%

18% 

23%

20%

-13% 

Investigated - 2nd Request Issued

15%

21%

14%

20%

21%

3%

2nd Requests Resulting in Challenge

71%

54% 

90%

100% 

87%

-13% 


Agencies Are Likely to Cast a Broader Net in Investigations.
  Although the number of acquisition transactions in fiscal 2010 increased 63% over the number reported in fiscal 2009, the total is still markedly below the average of approximately 1,900 transactions reported for the fiscal years 2006 through 2008.  With fewer transactions being reported under the HSR Act, the agencies are investigating and challenging more transactions that are too small to require reporting under the HSR Act, many of which have already been consummated.  In addition, reported transactions that raise competition issues are more likely to be investigated than in earlier years.  As always, issuance of a second request jeopardizes a transaction or requires major restructuring of it to address agency concerns.
 

Practical Tip

Address Antitrust Concerns Early in the Process.  A company considering an acquisition transaction that is likely to raise agency concerns should confer with its antitrust counsel during the negotiation process.  It should prepare to address those concerns with counsel during the preparation and filing of reports under the HSR Act and engage with antitrust authorities as soon as possible in the waiting period in order to avoid a second request.


Additional Information

This update is intended only as our summary of the Hart-Scott-Rodino Annual Report for Fiscal Year 2010.  You can find the full text of the report at http://www.ftc.gov/os/2010/10/101001hsrreport.pdf.

© 2011 Perkins Coie LLP


 

Sign up for the latest legal news and insights  >