On October 1, 2010, the U.S. federal antitrust agencies issued their Annual Report Regarding the Hart-Scott-Rodino (“HSR”) Premerger Notification Program for the fiscal year ended September 30, 2009. Of note, 7161 transactions were reported under the HSR Act during FY 2009; a decrease of 59% from the 1,726 transactions reported in FY 2008. While the overall number of second requests fell from 41 in FY 2008 to 31 in FY 2009, the percent of transactions resulting in second requests increased to 4.5%, up from 2.5% in FY 2008. The full report is available on the FTC’s website at http://www.ftc.gov/os/2010/10/101001hsrreport.pdf.
While there were no second requests issued with respect to transactions valued below the $100 million (as adjusted) HSR threshold, during this same period the FTC took enforcement actions against six transactions that were not reportable under the HSR Act, and the DOJ investigated 18 non-HSR reportable transactions, issuing civil investigative demands in seven of such transactions.2 The agencies brought two enforcement actions during FY 2009 for failures to comply with the HSR Act’s premerger reporting and waiting period requirements, resulting in $2.2 million in civil penalties.
The FTC and DOJ were fairly consistent in issuing second requests, at 15 and 16 respectively. The target industry groups that received the highest numbers of second requests were Chemical Manufacturing (5), Publishing (except Internet) (4), and Computer and Electronic Product Manufacturing (3), while the Professional, Scientific and Technical Services industry was the target in the highest number of HSR reportable transactions (50).
The DOJ noted a 79% increase in transactions for which HSR Notifications were filed between the first and second half of 2009,3 and FY 2010 transaction numbers are likely to be higher than those in the current report. Financial industry buyers were involved in approximately 160 of the 684 HSR reportable transactions during FY 2009 (approximately 18%). The increase in percentage of transactions resulting in a second request in FY 2009 is likely due, at least in part, to the reallocation of agency resources following the declining trend in number of transactions reported since FY 2007. Therefore, transaction parties would be well-advised to involve antitrust counsel early to ensure that competitively-sensitive documents are handled appropriately