Markets Wired

The Federal Trade Commission and the Justice Department’s Antitrust Division released the agencies’ 42nd Annual Hart-Scott-Rodino Report. The report provides HSR Premerger Notification data for fiscal year 2019. Under the HSR Premerger Notification Program, companies report some proposed mergers and acquisitions to the government before they occur, and the agencies identify and challenge those transactions that may substantially lessen competition in violation of federal law.

As the report explains, companies notified the agencies of 2,089 HSR reportable transactions during fiscal year 2019, which is a one percent decrease from the 2,111 transactions reported in fiscal year 2018. The report also summarizes the agencies’ merger enforcement activities for fiscal year 2019, with a total of 38 merger challenges brought to maintain competition in sectors of great importance to consumers, including consumer goods and services, pharmaceuticals, healthcare, high tech and industrial goods, and energy.

The Federal Trade Commission alone brought 21 merger enforcement actions in fiscal year 2019, including two mergers that the Commission voted to block through litigation. In nine other matters, the parties abandoned or restructured their transactions due to the Commission’s antitrust concerns. The Commission also issued consent orders in 10 merger cases, including the challenge to Praxair’s $80 billion proposed acquisition of competitor Linde.

Of note, in September 2019, the FTC issued an administrative complaint and authorized staff to seek a preliminary injunction to prevent the merger of Fidelity and Stewart, two of the four largest title insurance underwriters in the United States. Shortly after the Commission issued the complaint, the parties abandoned the merger.

The Report also provides a 10-year summary of HSR transactions reported, second requests issued, and early terminations granted by the agencies, as well as a detailed statistical profile of transactions reported during fiscal year 2019.      

Enacted by Congress in 1976, the Hart Scott Rodino Act gives the federal government the opportunity to investigate and challenge mergers that are likely to harm consumers before injury occurs. The Commission vote to issue the report was 4-0-1. Commissioner Rohit Chopra issued a statement. Commissioner Rebecca Kelly Slaughter did not participate.