United States: 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.

Footnotes

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.

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2020. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.