FTC Adjusts Merger Review Due to “Tidal Wave” in Merger Filings

Antitrust Update

Date: August 04, 2021

In an August 3, 2021 post on the FTC’s Competition Matters blog, the Federal Trade Commission (FTC) announced that parties to HSR-reportable transactions may in certain circumstances receive a “pre-consummation warning letter” prior to the expiration of the HSR waiting period. The letter will inform parties that even though the HSR waiting period may soon expire, the FTC’s investigation of their deal remains open, and that the agency retains the jurisdiction to investigate and challenge the transaction after its consummation.

The FTC noted that these “warning letters” are necessary because of the sheer number of recent merging filings and capacity restraints at the agency to fully investigate these deals within the requisite timelines. Specifically, the post characterized this increase in filings as a “tidal wave” and pointed out that the FTC lacked the resources to get through them all. According to statistics published on the FTC’s website, which the FTC described as “astounding,” there were 343 HSR transactions in July 2021 in comparison to 112 in July 2020.

As noted in the post, receipt of a warning letter by the FTC should not be construed as a sign that a deal is necessarily unlawful or will be challenged. However, the letter serves as a reminder to merging parties that there is no statute of limitations for the FTC (or DOJ for that matter) to review, investigate, and/or challenge a consummated deal (whether the deal was HSR reportable or not).

The roll-out of these “warning letters” also likely portends increased scrutiny of deals over the first few years of the Biden administration. As we saw with the indefinite suspension of the Premerger Notification Office’s Early Termination program, the FTC appears concerned that potentially problematic deals are slipping through HSR review without being properly addressed. Moreover, this new policy is consistent with the aggressive antitrust enforcement agenda set by President Biden’s July 9, 2021 Executive Order on Promoting Competition in the American Economy as well as the early actions taken by FTC Chairperson Lina Khan.


For more information, please contact:

Joshua Shapiro
Partner, Antitrust, Competition & Distribution

Mark R. Butscha, Jr.
Senior Managing Associate,
Antitrust, Competition & Distribution

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