Federal Trade Commission Resumes Granting Early Terminations
On March 27, 2020, the US Federal Trade Commission (FTC) announced that it would resume granting early terminations (ETs) of merger filings made under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act). The FTC previously said that it would not grant ET while its temporary e-filing program for HSR filings was in effect during the COVID-19 crisis. Whether ET is granted is an important deal-timing consideration; without it, filing parties must wait the entire 30-day waiting period prior to closing their transactions.
The FTC’s action is not without qualifications. ET will be granted only as “time and resources allow.”[1] The FTC said that because staff is at capacity, it is going to “prioritize” filings with potential issues.[2] The FTC specifically stated that it will continue to investigate fully all competition concerns, “consistent with the Bureau’s normal practice,” and it will resolve any doubts against granting ET.[3] The FTC also warned that the number of deals receiving ET would be lower than normal, and the timeline to ET will be longer than normal. In FY 2018,[4] ET was granted for nearly 80% of filings where it was requested.[5] Based on Mayer Brown’s own tracking, ET typically is granted around calendar day 14 of the HSR waiting period.
The resumption of ET is a good sign for parties contemplating transactions. But, given the FTC’s caveats, parties should be prepared that the HSR waiting period still will take the full 30-days. Moreover, the FTC’s strong admonition that it is continuing to investigate all competition concerns thoroughly serves as a reminder that antitrust laws always apply, even in times of crisis.
[1] See “Resuming early termination of HSR reviews,” By Ian Conner, Bureau of Competition, Mar. 27, 2020, https://www.ftc.gov/news-events/blogs/competition-matters/2020/03/resuming-early-termination-hsr-reviews.
[2] Id.
[3] Id.
[4] The US government’s 2018 fiscal year ran from October 1, 2017 to September 30, 2018.
[5] See “Hart-Scott-Rodino Annual Report, Fiscal Year 2018,” at 6, https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-bureau-competition-department-justice-antitrust-division-hart-scott-rodino/fy18hsrreport.pdf.
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