On September 26, the Antitrust Division of the US Department of Justice (DOJ) challenged Parker Hannifin Corporation’s acquisition of CLARCOR Inc. The challenge was launched seven months after the parties completed the antitrust review required by the Hart Scott Rodino Act (HSR) and closed on the transaction. The DOJ seeks to unwind a portion of the acquisition by forcing Parker Hannifin to divest either Parker Hannifin’s or CLARCOR’s aviation fuel filtration assets, so that a separate competitor can be created in the aviation fuel filtration business. The complaint alleges that the parties are the only two US manufacturers of aviation fuel filtration products that meet the technical specifications required by airlines, the US military and other US purchasers of aviation fuel. The complaint further alleges that the parties are head-to-head competitors in the sale of aviation fuel filtration systems and aviation fuel filtration elements.
The DOJ press release announcing the lawsuit claims that Parker Hannifin failed to provide certain documents and data concerning the fuel filtration business and refused to enter into a hold separate agreement covering the fuel filtration assets while the DOJ concluded its investigation.. In recent years the DOJ and the Federal Trade Commission have challenged a number of consummated M&A transactions where no HSR filing was required. This is a rare post-closing challenge where the parties went through the HSR process.