CandleFocus Glossary Editor
The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) is a significant piece of US antitrust legislation, providing the Federal Trade Commission (FTC) and the Department of Justice with the power to review certain mergers and acquisitions. It is designed to ensure that large business consolidations and market concentration do not take place that would reduce competition.
Under the HSR Act, two thresholds must be exceeded before a filing is required with the FTC and the Department of Justice. These thresholds are based on both the size of the transaction and the size of the businesses involved in the transaction. Specifically, the acquisition of voting securities or assets must amount to $76.3 million or more; and either the size of the acquired assets or the acquisition of the voting stock must result in one party having assets or sales of more than $152.5 million.
Before a company can move forward with a proposed transaction, it must notify the FTC and the Department of Justice and provide them with enough detailed information to allow regulators to determine whether the merger should be reviewed further. These pre-merger notifications serve as early warnings of potential anti-competitive situations, allowing regulators to act promptly to prevent big corporations from forming monopolies through mergers and acquisitions.
The HSR Act also grants the FTC and the Department of Justice the authority to request additional information from companies and to reject mergers and acquisitions on antitrust grounds. If regulators determine that a merger would significantly reduce competition, they can seek to preliminarily enjoin the transaction or seek a negotiated solution on behalf of the consumer. The Act also sets out fines for companies that fail to comply with its requirements.
The HSR Act has played a significant role in keeping antitrust enforcement alive and preventing large companies from manipulating the market. It has provided the FTC and the Department of Justice with the ability to review and approve pre-merger transactions and ensure the preservation of the competitive process. The Act continues to play an important role in preventing market monopolies, providing more choices and better prices to consumers.
Under the HSR Act, two thresholds must be exceeded before a filing is required with the FTC and the Department of Justice. These thresholds are based on both the size of the transaction and the size of the businesses involved in the transaction. Specifically, the acquisition of voting securities or assets must amount to $76.3 million or more; and either the size of the acquired assets or the acquisition of the voting stock must result in one party having assets or sales of more than $152.5 million.
Before a company can move forward with a proposed transaction, it must notify the FTC and the Department of Justice and provide them with enough detailed information to allow regulators to determine whether the merger should be reviewed further. These pre-merger notifications serve as early warnings of potential anti-competitive situations, allowing regulators to act promptly to prevent big corporations from forming monopolies through mergers and acquisitions.
The HSR Act also grants the FTC and the Department of Justice the authority to request additional information from companies and to reject mergers and acquisitions on antitrust grounds. If regulators determine that a merger would significantly reduce competition, they can seek to preliminarily enjoin the transaction or seek a negotiated solution on behalf of the consumer. The Act also sets out fines for companies that fail to comply with its requirements.
The HSR Act has played a significant role in keeping antitrust enforcement alive and preventing large companies from manipulating the market. It has provided the FTC and the Department of Justice with the ability to review and approve pre-merger transactions and ensure the preservation of the competitive process. The Act continues to play an important role in preventing market monopolies, providing more choices and better prices to consumers.