Due to an unprecedented volume of filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act),1 the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) announced today they will suspend the practice of granting early termination of the 30-day waiting period (15 days in the case of a cash tender or bankruptcy transaction) under the HSR Act.
As a result, parties subject to HSR Act requirements must expect to wait at least the full 30 days before closing on their transaction. Under the HSR Act, companies of a certain size involved in a transaction exceeding reportability thresholds are required to file a pre-merger notification with the DOJ and FTC and observe a waiting period of 30 days, unless early termination of that 30-day waiting period is requested by the parties and granted by the FTC.
Citing the increased number in filings, the transition to the new administration, and the ongoing pandemic, the FTC stated "we will presume we need those 30 days to ensure we are doing right by competition and consumers." Similarly, the DOJ stated that it supported the temporary suspension of early termination grants "to ensure appropriate review of transactions during this challenging transition period." During this period, the agencies will be reviewing the processes and procedures they use to determine whether to grant early termination to filings made under the HSR Act.
While the agencies did not specify how long they would suspend grants of early termination, the agencies "anticipate that this temporary suspension will be brief." Last year, the agencies announced a similar temporary halt to early terminations due to the FTC's adoption of new e-filing procedures in response to COVID-19, during which early termination grants were suspended for approximately two weeks (from March 17 to March 30, 2020).
1 According to the FTC, January 2021's HSR Act filings were up nearly 30 percent from the same month last year.