Another Major Hart-Scott-Rodino Warning From The FTC

Two recent Federal Trade Commission (FTC) actions confirm the Hart-Scott-Rodino Act (HSR) is not to be ignored. On Dec. 22, the FTC fined both Biglari Holdings and the founder of Werner Enterprises for failure to file with the FTC and the Department of Justice (DOJ) before consummating significant acquisitions of related entities.

Under HSR, parties to mergers and acquisitions that meet certain size thresholds must notify the antitrust enforcement agencies of the pending transaction. Parties also cannot close the transaction until the HSR deadline has passed. Significantly, HSR can apply when an entity acquires additional stock in a company (i.e., in addition to stock it already owns). Therefore, if after the pending acquisition the acquirer's aggregate holdings would exceed HSR thresholds, the acquirer must file under HSR. Individuals and corporations who fail to abide by these filing requirements are in violation of federal law and subject to significant civil