Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act), transactions subject to reporting and waiting period requirements (generally, those valued in excess of $94 million) are reviewed by the United States Federal Trade Commission (FTC) and the Department of Justice Antitrust Division (DOJ). The two agencies have 30 days from receipt of an HSR filing to review the materials, investigate and decide whether to issue a second request for documents and information, which imposes an additional waiting period during which the parties to the transaction may not close. In light of both agencies’ response to COVID-19, parties to transactions requiring agency review should expect extensions of the waiting periods and delays in the processing of investigations.

In normal times, the agencies might grant early termination of the initial 30-day waiting period for transactions where there is no apparent competitive concern. In other transactions, many things occur within the first 30 days. First, the HSR filings must go through a clearance procedure to determine which agency will conduct the review. Then, staff at the agency conducting the investigation may contact counsel for the parties, issue a voluntary access letter seeking voluntary production of information that may assist in determining whether to issue a second request, conduct interviews with customers and competitors of the parties, and prepare recommendations to agency management as to whether a second request should be issued.

If a second request is issued, the agencies may request a timing agreement, under which the parties agree not to close for some time in addition to the statutory 30-day waiting period following certification of compliance with the second request. Timing agreements allow for orderly review of the extensive documents and information produced in response to second requests, follow-up discussions to address the agency’s competitive concerns and negotiation of an agreed-upon remedy to resolve those concerns prior to initiation of litigation before the courts. In 2018, the DOJ had stated a goal of resolving most investigations within six months of the HSR filing, provided that the parties promptly comply with DOJ requests throughout the entire process. The FTC was more reluctant to agree to such a timing goal.

With the ongoing COVID-19 pandemic, the staff at the agencies are working remotely and holding conferences by phone rather than conducting in-person meetings. The agencies are no longer accepting physical HSR filings in paper or by physical delivery of DVDs. All HSR filings must now be made through an electronic file transfer system previously used by the FTC for document productions.

You can read the rest of the article on the Duane Morris website