Washington Premerger Notification Law

As of July 27, 2025, federal Hart-Scott-Rodino (HSR) Act filings will need to be submitted to the Washington Attorney General (WA OAG) under Washington State’s Antitrust Premerger Notification Act (APNA) if the parties have a certain minimum geographic nexus to the state of Washington. 

Under APNA, parties will need to submit a copy of their HSR filing to the WA OAG at the same time as their submission to the US Federal Trade Commission (FTC) and US Department of Justice (DOJ) if they: (1) have a principal place of business in Washington; (2) generated in-state net revenues in the prior year from the type of goods or services involved in the transaction of at least 20% of the minimum size of the HSR filing threshold (i.e., local annual net sales of at least $25.28 million in 2025); or (3) provide healthcare services within the state. While APNA imposes civil penalties for failure to file, the new law does not require a filing fee and does not impose a waiting period that prevents the transaction from closing.

Filing parties with their principal place of business in Washington must provide a complete copy of the federal HSR filing, including all exhibits and attachments submitted to federal agencies. Otherwise, the filing party need only include all exhibits and attachments at the request of the Attorney General.

Exhibits and attachments to the HSR filing include Transaction Information and Business Documents (formerly referred to as 4(c) and 4(d) documents), which often contain internal analyses of competition, market share, and strategic rationale. The law requires that submissions be made contemporaneously with the federal HSR filing, with no separate state waiting period imposed.

To preserve confidentiality, Washington’s statute expressly exempts submitted materials from public disclosure under the state’s public records laws. Disclosure is allowed only in the context of official proceedings and subject to protective orders. The statute also authorizes — but does not require — the Washington Attorney General to share filings with the Federal Trade Commission, the Department of Justice, or Attorneys General in other states with substantially similar premerger laws. This discretionary sharing mechanism is designed to support coordinated multi-jurisdictional enforcement efforts while maintaining strict confidentiality protections.

To promote compliance, the law includes an enforcement mechanism that allows for civil penalties of up to $10,000 per day for failure to file. This underscores the need for deal teams to incorporate Washington’s requirements into their closing checklists, particularly where either party has significant operations or revenue within the state.

Colorado’s Pre-Merger Notification law

Colorado’s Uniform Antitrust Pre-Merger Notification Act becomes effective on August 6, 2025.

Colorado’s Act applies across all industries, but only to transactions that are already subject to federal HSR reporting.

Under the statute, a qualifying party must provide a copy of its HSR filings to the Colorado Attorney General contemporaneously with its federal submissions, if the transaction in question meets one of the state’s nexus triggers.

Like in Washington, a party must provide a copy of its HSR filing to the Colorado Attorney General if: (1) a party to the transaction maintains its primary business headquarters within Colorado; or (2) a party to the transaction — or any entity it directly or indirectly controls — has annual net sales in Colorado related to the proposed transaction equal to or greater than 20 percent of the current HSR size-of-transaction threshold. As of 2025, with HSR thresholds at $126.4 million, the Colorado revenue trigger would equal $25.28 million in in-state sales.

Filing parties are generally required to submit an electronic copy of the complete HSR filing, including all exhibits and attachments. This ensures the Attorney General has access to the same substantive materials being reviewed by federal regulators.

Recognizing the commercially sensitive nature of merger filings, Colorado’s Pre-Merger Notification Act includes confidentiality protections. All materials submitted to the Colorado Attorney General under this law are confidential and exempt from public disclosure under the Colorado Open Records Act. Disclosure is permitted only in connection with administrative or judicial proceedings and then only under appropriate protective orders.

Colorado’s Pre-Merger Notification Act also authorizes — but does not require — the Attorney General to share information with the Federal Trade Commission, the U.S. Department of Justice Antitrust Division, and Attorneys General in other states that have adopted substantially similar legislation. It also authorizes the Colorado Attorney General to seek civil penalties of up to $10,000 for each day a party remains out of compliance.

Broader Trend of State Oversight

More states are following Washington and Colorado’s example. California, Hawaii, West Virginia, and the District of Columbia have introduced legislation that would apply to HSR-reportable transactions where a party has either its principal place of business in the state or derives at least 20 percent of its U.S. revenue from in-state operations. Notably, California’s proposed legislation includes a separate filing fee of $1,000 where a party has its principal place of business in California or $500 where the party meets the revenue threshold.

Utah and Nevada similarly introduced legislation largely mirroring Washington, Colorado, and the Uniform Antitrust Pre-Merger Notification Act. However, both bills failed to pass in the most recent legislative sessions.

New York recently proposed legislation requires any party conducting business in the state that is required to submit an HSR filing to contemporaneously provide the same notice and documentation, in its entirety, to the Attorney General.

The states are becoming more aggressive in terms of antitrust enforcement. Last year, the Colorado AG filed its own merger challenge to the Kroger/Albertsons merger separate and apart from the FTC’s challenge and litigated the case in CO state court. Notably, the Washington AG (which also has a state-level prenotification act) also challenged the merger and litigated the case in state court. 

Considerations for Businesses

For companies involved in M&A activity, these new laws introduce both strategic and operational considerations. First, dealmakers need to identify merger notification obligations early and consider incorporating potentially applicable state-law filing obligations into the due diligence process alongside HSR and other regulatory assessments, such as international merger control and foreign direct investment rules. State-level filing requirements could also be reflected in transaction timelines and closing conditions to help avoid last-minute compliance risks.

Second, filing parties also should account for the potential resource implications of the new law, including legal review, administrative processing, and possible engagement with State Attorneys General. Although the state laws do not impose waiting periods or clearance requirements, parties should anticipate increased scrutiny of transaction rationales, competitive effects, and state-specific market dynamics.

Third, companies may also want to revisit their internal document generation practices and carefully evaluate whether ordinary-course business materials contain language discussing competitive effects, market strategy, or industry dynamics — especially where such documents may be included in HSR filings and thus disclosed to state authorities.

Lessons Learned

There is a shift in how states are approaching merger oversight, signaling that state attorneys general intend to play a more active and earlier role in antitrust enforcement. While the laws impose relatively modest procedural obligations, they reflect a growing trend of decentralized regulatory scrutiny that may add complexity to deal execution. Fund managers, strategic acquirers, and other deal participants should plan ahead by evaluating both federal and state merger notification requirements early in the transaction lifecycle and consulting with counsel.

Andre Barlow

202-589-1838

The staff attorneys who run investigations and negotiations at the Commission are out of the office, which means that parties are simply waiting while everything is on hold.  HSR waiting periods will continue to run during a government shutdown.  DOJ and FTC staff will continue to review premerger filings and conduct investigations to determine whether to challenge reported transactions under the antitrust laws.  Second Requests will continue to be issued and, if engaged in merger litigation, FTC and DOJ attorneys will notify opposing parties and the courts of the government shutdown and attempt to negotiate timing extensions and suspensions. If such relief is not available, they will continue to litigate the matter.

The DOJ and the FTC both issued contingency plans indicating that certain employees connected to antitrust enforcement within the Antitrust Division of the DOJ and the Bureau of Competition at the FTC will be excepted from the furlough and will continue to conduct antitrust enforcement activities.

While difficult to predict, there may be delays in review of certain strategic transactions (including increased risk of a “pull and refile” scenario, or a higher likelihood of a Second Request being issued). Transactions with substantive antitrust issues will likely still receive scrutiny by the agencies, and the shutdown is unlikely to decrease the likelihood of a Second Request or challenge if the agencies believe circumstances warrant such action. If anything, some parties who file during the shutdown may be more likely to get a Second Request than they would have been if there was no government shutdown because they will not have the full 30 days to provide information to address an agency’s initial questions.

In the current DOJ Contingency Plan, of the 655 Antitrust Division employees, a total of 264 (40%) are excepted from furlough in the case of a government shutdown. In the current FTC Contingency Plan, of the 306 total Bureau of Competition employees, a total of 132 (43%) are excepted from the furlough. Moreover, within the Bureau of Economics, of the 105 employees, 10 (9%) are excepted from the furlough.

The FTC is suspending all Second Request and non-merger investigations currently underway during the shutdown. According to the DOJ contingency plan, the DOJ will operate with limited staffing to those employees necessary to launch or continue merger investigations or litigation where it cannot obtain a continuance or extension of a statutory deadline.  

At the FTC, Second Requests will be issued and, once issued, the staff will go back to being furloughed. The five Commissioners are still working.  There is not much merging parties can do to speed up the process so the FTC investigations will be delayed. The DOJ is operating at more strength and the front office is still at work.  Both agencies, however, will try to work to achieve certain transaction deadlines.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

FTC Seeks to Unwind Merger of Prosthetic Knee Manufacturers

On December 20, 2017, the FTC filed an administrative complaint to unwind the merger of Otto Bock HealthCare North America, Inc., (“Otto Bock”) and FIH Group Holdings, LLC (“Freedom”), two manufacturers of prosthetic knees equipped with microprocessors that adapt the joint to surface conditions and walking rhythm.  In September 2017, the parties simultaneously signed a merger agreement and consummated the merger without the FTC having an opportunity to review the deal.  Apparently, the merger was not HSR reportable.  According to the FTC, the merger eliminated direct and substantial competition between head to head competitors that engaged in intense price and innovation competition.  While the litigation is ongoing, the parties agreed to a Hold Separate and Asset Maintenance Agreement, which prevents them from continuing the integration of the two businesses.  The FTC did not allege any violation of the HSR ACT.

DOJ Requires a Divestiture Remedies in Consummated Asset Deal

On December 21, 2017, the DOJ announced a settlement that required TransDigm Group Inc. (“TransDigm”) to divest two airline passenger restraint businesses that it had acquired from Takata Corp. in February of 2017 for $90 million.  Due to the transaction’s structure, it was not HSR reportable so the DOJ did not have the opportunity to review the deal.  Nevertheless, the DOJ investigated the transaction and found that it had eliminated the only meaningful competitor to TransDigm in the market for commercial airplane restraint systems, including traditional two-point lap belts, three-point shoulder belts, technical restraints, and more advanced inflatable restraint systems such as airbags.  According to the DOJ, competition between the two companies led to lower prices and more innovation in the industry.  To resolve the concerns, the DOJ required a structural remedy to an already approved consortium.

DOJ Settles Parker-Hannifin Lawsuit

In September 2017, the DOJ challenged Parker-Hannifin’s consummated acquisition of CLARCOR Inc. alleging that it had eliminated head-to-head competition between the only two domestic manufacturers of fuel filtration systems and filter elements. The DOJ challenged the transaction after it had allowed the initial waiting period under the HSR Act to expire in mid-January 2017.  The HSR was filed during the holidays and expired around the inauguration.  There was no allegation that the parties withheld 4(c) documents or did anything unusual to prevent the DOJ from conducting a thorough review.  The DOJ had everything it needed to make a decision to issue a second request.  Apparently, the DOJ simply missed the overlapping businesses in the initial review period and allowed the waiting period to expire.  In December 2017, the DOJ announced a settlement with Parker-Hannifin that required a structural remedy, the divestiture of the fuel filtration assets.

Lessons Learned

No deal is ever done.  These enforcement actions demonstrate that the antitrust agencies are committed to challenging completed deals that substantially lessen competition.  These enforcement actions by the antitrust agencies send a strong message to corporate executives and antitrust counsel that antitrust risks do not end once a deal is consummated, and that a transaction is not free of antitrust exposure simply because the transaction is not reportable under the HSR Act or that the HSR waiting period was allowed to expire without contact from the antitrust agency.  Corporate and private counsel would like assurances that the HSR waiting period provides closure to the antitrust review.  Apparently, the expiration of the HSR waiting period does not end the antitrust review.  Given these examples, corporate executives must have its antitrust counsel assess the antitrust risk of closing a transaction that has some antitrust exposure for a post-closing investigation and challenge.  These examples show that consummating deals that raise serious antitrust concerns may lead to defending against lengthy and costly investigations; defending against litigation; and reorganizing to the government’s demands of divestitures even after some initial integration has taken place.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

Background

On September 22, 2017, Otto Bock and Freedom simultaneously executed a merger agreement and consummated their merger.  Within four days of the acquisition, Otto Bock publicized to the world in its September 26, 2017 press release that “Otto Bock strengthens the leading position in prosethetics” and that the deal combined the #1 and #3 players in the field of prosethetics in the United States.  It further went on to state that the acquisition expands its market share and “antitrust issues have already been clarified” so they closed the merger and Otto Bock then took steps to integrate Freedom’s business, including personnel, intellectual property, know-how, and other critical assets.

Within three months of the closing, the FTC filed a complaint to unwind the deal.  According to the FTC’s administrative complaint, the merging parties are head-to-head competitors in the manufacture of prosthetic knees with microprocessors that adapt the joint to surface conditions and walking rhythm.  Specifically, the FTC alleges that Otto Bock and Freedom engaged in intense price competition as well as offered dueling improvements in innovation.  The deal eliminated head-to-head competition between the two companies, removed a significant and disruptive competitor, and entrenched Otto Bock’s position as the dominant supplier.

Microprocessor knees, which use microprocessors to adjust the stiffness and positioning of the joint in response to variations in walking rhythm and ground conditions, provide a stable platform for amputees. Prosthetists and doctors typically prescribe microprocessor knees to patients with above-the-knee amputations who have a relatively high degree of mobility. Compared to other products, microprocessor prosthetic knees reduce the risk of falling, cause less pain, and promote the health and function of the sound limb.

New entry or expansion by other manufacturers of microprocessor knees is not likely to be timely or sufficient to offset the anticompetitive effects of the merger. The complaint notes that it routinely takes firms more than two years just to develop a microprocessor knee, even when they are building on existing microprocessor knee technology.

Lessons Learned

The FTC’s administrative complaint serves as a reminder to corporate executives that antitrust risks do not end once a deal closes, and that a transaction is not free of antitrust risks simply because the transaction is not reportable under the HSR Act.  The complaint also demonstrates the risks of closing a deal that presents antitrust concerns and makes clear that such challenges will be pursued by the FTC.  The parties to the deal now are involved in costly litigation.  Accordingly, corporate and private counsel must be aware of the likely consequences and risks of consummating deals that raise significant antitrust concerns but for one reason or another avoided an antitrust review.  In strategic transactions, corporate counsel must reach out to experienced antitrust counsel for an antitrust assessment.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

The Department of Justice’s Antitrust Division (“DOJ”) and Federal Trade Commission (“FTC”) have for years emphasized that they will investigate and challenge consummated transactions that were not initially reviewed or slipped through the cracks if those transactions substantially lessen competition.  It does not matter that for one reason or another that merging parties were able to successfully avoid a long drawn out investigation.  The DOJ’s lawsuit to block Parker’Hannifin’s acquisition of CLARCOR, Inc. illustrates that the DOJ may open an investigation and challenge a transaction even after it allowed the Hart-Scott Rodino (“HSR”) waiting period to expire.  The enforcement action also serves as a reminder that if merging parties do not cooperate with a merger investigation, they risk being sued.

DOJ Sues Parker-Hannifin Seven Months After Allowing it to Close its Acquisition of CLARCOR

On September 26, 2017, the DOJ continued its policy of blocking consummated transactions that harm competition, with its legal challenge to Parker-Hannifin’s $4.3 billion acquisition of CLARCOR.  Parker-Hannifin and CLARCOR entered into a deal on December 1, 2016 and closed the transaction on February 28, 2017 so the DOJ allowed the HSR waiting period to expire without taking any enforcement action or issuing a Second Request.  Approximately, seven months after closing the transaction, Parker-Hannifin is now put in the position of defending itself in court for a deal that it likely thought was approved.

Apparently, the DOJ opened an investigation into the combination after the deal closed.  There are not many details on what happened, but the DOJ’s Press Release announcing the lawsuit says that “during the pendency of the department’s investigation, Parker-Hannifin failed to provide significant document or data productions in response to the department’s requests.  In addition, the company has not agreed to enter into a satisfactory agreement to hold separate the fuel filtration businesses at issue and to maintain their independent viability pending the outcome of the investigation and, now, this litigation.”  What is also clear from the DOJ’s complaint is that several weeks prior to the deal announcement, Parker-Hannifin and CLARCOR had an email communication about the competitive overlap in the aviation filtration business, whether they should be forthcoming about the anticompetitive concern, and Parker-Hannifin informed CLARCOR that it was preparing to divest CLARCOR’s aviation fuel filtration business to obtain antitrust approval.

From the Press Release, however, the DOJ appears to be suggesting that Parker-Hannifin was not fully cooperating with the merger investigation or at least to the DOJ’s liking nor has Parker-Hannifin offered a sufficient remedy to resolve the DOJ’s competition concerns.

DOJ Alleges that the Deal is a Merger to Monopoly in a Relevant Market that Requires a Divestiture to Resolve the Concerns 

The DOJ alleges that the deal substantially lessens competition in the development, manufacture, and sale of aviation fuel filtration products in the United States.  Aviation fuel must be filtered properly to remove particulate contaminants and water droplets before such fuel is delivered into commercial or military aircraft.  The failure to do so can result in engine failure.  For this reason, aviation fuel filtration systems and filtration elements must be subjected to rigorous testing and qualification requirements.  U.S. commercial and military planes can only use aviation fuel filtration products qualified by the Energy Institute (“EI”).  The DOJ further alleges that the deal creates a monopoly in the United States as Parker-Hannifin and CLARCOR were the only two manufacturers of El-qualified aviation fuel filtration systems and filters.  So, the acquisition eliminated direct competition and the DOJ alleges that entry is not likely.

With this set of facts, the DOJ would typically requires a divestiture of the aviation fuel filtration business or assets to an appropriate buyer in order to restore competition that existed prior to the acquisition.  Allegedly, to date, Parker Hannifin has not fully cooperated with the investigation nor has it offered a remedy to the DOJ’s liking.  Thus, the DOJ filed a lawsuit seeking an order that Parker-Hannifin divest tangible and intangible assets sufficient to create a separate, distinct, and viable competing business that can replace CLARCOR’s competitive significance in the marketplace.

The ball is in Parker-Hannifin’s court now.  It must decide whether to defend the lawsuit or enter into settlement negotiations regarding a divestiture.

Observations

The DOJ’s willingness to file a complaint challenging this deal demonstrates that the DOJ is serious about enforcing the antitrust laws against consummated mergers that substantially lessen competition and that the DOJ will not back down to companies that fail to fully cooperate with its merger investigations.  The challenge also demonstrates that completed deals that slip beneath the agency’s radar screen initially are fair game if the DOJ learns about the anticompetitive effect later.  Corporate executives that enter into deals that raise competitive concerns must be aware that antitrust investigations that appear to be done may not be.  While corporate and private antitrust counsel would like assurances that the expiration of the HSR waiting period provides closure to the antitrust review, they must be mindful that the expiration of the HSR waiting period does mean that the merged firm is in the clear because sometimes competitive concerns are not readily apparent or customers may fail to raise concerns within the relevant HSR waiting period.  Accordingly, parties to a consummated deal that raise significant antitrust issues and avoided HSR scrutiny, for whatever reason, should proceed with reasonable caution and closely monitor post-acquisition conduct.  Moreover, corporate and private counsel should be aware of the likely consequences and the risks of not cooperating with the government’s merger investigation and consummating transactions that raise significant competitive issues.  The risks may include: defending against costly and lengthy government investigations; reorganizing to the government’s demands of possible divestitures even after integration has taken place; and disgorgement of profits gained from the alleged anticompetitive merger.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

The HSR Act gives the federal government the opportunity to investigate and challenge mergers that are likely to harm consumers before injury occurs.  The HSR Act requires that the parties to certain proposed transactions submit HSR filings to the FTC and Department of Justice. These filings comprise of an HSR Form, which contains information about each company’s business, and relevant business documents regarding competition.

Currently, all HSR filings are submitted in paper form. By allowing HSR filings to be submitted on DVD, the amendments eliminate the expensive and time-consuming printing and duplication of electronically maintained documents that are submitted to the antitrust agencies.

The amendments also update the instructions that apply to the HSR Form. Some updates relate to DVD filing but most aim to make the instructions more straightforward and easier to understand.

The Commission vote to publish the Federal Register Notice was 3-0.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

HSR Exemption

The HSR Act imposes notification and waiting period requirements for transactions meeting certain size thresholds to ensure that such transactions undergo premerger antitrust review by the DOJ and the Federal Trade Commission.  The HSR Act has a narrow exemption for acquisitions of less than 10 percent of a company’s outstanding voting securities if the acquisition is made “solely for the purposes of investment” and the purchaser has no intention of participating in the company’s business decisions.  In other words, if a person or company intends to be a passive investor and the investment in securities is less than 10 percent of a company’s outstanding securities, the exemption may apply.

DOJ Complaint Against ValueAct

On April 4, 2016, the DOJ filed a complaint against three ValueAct related entities for allegedly violating the reporting requirements of the HSR Act when they acquired voting securities, collectively valued at more than $2.5 billion, in both Baker Hughes and Halliburton.  The DOJ alleged ValueAct was an activist firm that acquired the securities with the intent of influencing the companies’ business decisions.  In other words, the DOJ alleged that ValueAct was not a passive investor at all. All three ValueAct entities allegedly made acquisitions that exceeded the filing threshold, and the issue, as alleged in the DOJ’s complaint, was solely whether the “investment only” exemption —which applies if the purchaser’s holdings constitute less than ten percent of the stock of the company and the acquisition is “solely for the purpose of investment”—applied.  The DOJ alleged that ValueAct’s investment was not passive given its access to Halliburton and Baker Hughes executives and ValueAct’s role in actively influencing the HSR process.

Settlement

These cases usually settle without litigation, but ValueAct decided to push the issue and claimed that it would litigate rather than settle.  Given the facts and the detail in the complaint, ValueAct’s decision to fight the DOJ was ill-advised.  Accordingly, ValueAct ended up paying a record penalty and is enjoined from relying on the investment only exemption in the future if it intends on taking an active role in influencing the acquired entity’s business decisions.

Lesson Learned:

The DOJ’s record monetary penalty and injunctive relief demonstrate the DOJ’s continued vigorous enforcement of the HSR notification and waiting period requirements.  The HSR Act is crucial to the DOJ’s and FTC’s ability to prevent anticompetitive mergers and acquisitions.  The HSR Act has a number of exemptions.  Activist investors are now on notice that the narrow exemption for acquisitions of less than 10 percent of a company’s outstanding voting securities if the acquisition is made “solely for the purposes of investment” ONLY applies when the purchaser has no intention of participating in the company’s business decisions.  Moreover, if the activist investor knows that it is taking a position in two firms that will be subject to a substantive antitrust review, it should be particularly careful about relying upon the “investment only” exemption.  Here,the Second Request investigation allowed the DOJ the opportunity to discover documents that clearly indicated that the investment was active and not passive.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com

A.    Martin Marietta/Texas Industries

On June 26, 2014, the Antitrust Division approved Martin Marietta Materials, Inc.’s $2.7 billion acquisition of Texas Industries on the condition that Martin Marietta divest a quarry in Oklahoma and two Texas rail yards used by it to distribute aggregate in the Dallas area.

The transaction was announced on January 28, 2014 and the investigation along with a settlement agreement was completed within five months.  Because the Antitrust Division had a wealth of experience investigating mergers of firms that produce aggregates and the parties were cooperative in terms of providing information and a solution to remedy the competitive harms, the Antitrust Division was able to complete the investigation quickly.  Indeed, the parties’ Merger Agreement included language regarding divestiture of one of the overlapping quarries located in Mill Creek, Oklahoma and up to two of the related rail yards located in Dallas, Texas.  In other words, Martin Marietta and Texas Industries were already prepared to part with a quarry in Mill Creek, Oklahoma, and two rail yards in Dallas, Texas.

The DOJ alleged that production and sale of aggregates is a relevant market.  Aggregate is used in a variety of applications, such as road construction, and for the production of ready mix concrete and asphalt.  The DOJ also alleged that the proposed transaction would have likely resulted in increased prices for customers in Mill Creek, Oklahoma and in Dallas, Texas.  To resolve the Antitrust Division’s concerns, Martin Marietta agreed to divest its North Troy aggregate quarry in Mill Creek, Oklahoma, its rail yard in Dallas, and its rail yard in Frisco, Texas.

B.     Landmark Aviation/Ross Aviation

On July 30, 2014, the DOJ approved Landmark’s acquisition of Ross with conditions.  Each provided fixed base operator assets used to provide flight support services to general aviation customers.  The transaction involved one overlap, at the Scottsdale Arizona Municipal Airport, where the parties were the only providers of such services.  Early in the initial Hart-Scott-Rodino (“HSR”) waiting period, the parties offered to divest Ross’s relevant assets in Scottsdale and identified a buyer.  The complaint and settlement agreement were filed within 60 days of the HSR filing.  The transaction closed within three months of executing the merger agreement.

C.    Tyson Foods Inc./Hillshire Brands Co.:

On August 27, 2014, the DOJ approved Tyson Foods’ acquisition of Hillshire Brands with conditions.  The transaction was announced on July 1, 2014 and the Antitrust Division issued a second request related to monopsony concerns.  On August 12, 2014, narrowly tailored second requests were issued to Tyson Foods and Hillshire Brands related to a small portion of the overall business.  According to the DOJ, the merger would have combined companies accounting for more than a third of all sow purchases from U.S. farmers.  To resolve the monopsony concerns, Tyson quickly agreed to divest its sow purchasing business and the parties were not required to comply with the second requests.  The complaint and accompanying settlement agreement were filed within 60 days of announcement of the deal.

Lessons Learned

The DOJ’s second request investigation into Martin Marietta’s proposed acquisition of Texas Industries; Landmark Aviation’s proposed acquisition of Ross Aviation; and Tyson Foods’ acquisition of Hillshire Brands are illustrative of how merging parties can obtain approval of a transaction with conditions in a relatively short period of time.  Given the trajectory of past merger investigations involving firms’ with overlapping aggregates businesses, the DOJ had the experience to complete the investigation quickly.  In each transaction, the horizontal issues presented by the combinations were limited to either one product overlaps or an overlap in two geographic areas so full compliance with the second request was not necessary.  The DOJ focused on the specific horizontal overlaps that raised antitrust concerns.  The parties, in each case, helped the staff move the case along by providing as much information as possible at the beginning of the investigation and in each case it was clear that their antitrust lawyers knew the areas that presented the most significant antitrust concerns.  Indeed, the parties’ early decisions that they would divest the overlapping issues allowed them to navigate through the second request and negotiate a consent decree within two months (Landmark Aviation/Ross Aviation and Tyson Foods/Hillshire) and five months (Martin Marieta/Texas Industries) of announcement of the transaction.

These examples illustrate that closing a deal within a certain time frame can still be accomplished even if the transaction raises an antitrust concern. The key is to engage the staff early.  Antitrust counsel should provide customer lists, key documents, the structure of the merging companies, and identify the potential areas/markets of concern (either provide reasons why there is no problem or remedies).  If the issues are straightforward, there is no need to wait as discussions relating to remedies can begin as soon as practicable.  Antitrust counsel should be prepared to identify the assets to be divested as well as suitable and willing buyers that can maintain competition with those assets.  As the examples above illustrate, early and constructive discussions relating to remedies allow the Antitrust Division to complete its review and draft a consent decree that resolves those concerns within a short period of time.

Andre Barlow
(202) 589-1838
abarlow@dbmlawgroup.com