The Hart-Scott-Rodino Act requires pre-acquisition notification to the Federal Trade Commission and U.S. Department of Justice of certain acquisitions of voting securities, assets and noncorporate (e.g., LLC) interests so as to enable the agencies to conduct pre-acquisition antitrust review. Acquisitions of minority interests of voting securities (“partial acquisitions”) may trigger HSR, and the rules that have been in effect since the inception of the HSR program in 1978 are complex and can require parties to make multiple HSR filings over time and at different ownership levels even if a 50 percent or greater interest is never reached.
With a working group within the International Competition Network having recently advised that “[a]cquisitions of a minority interest should not be included in the scope of merger review if they are unlikely to be competitively significant”[1] and with an administration focused on deregulation, this is a good time to revisit the HSR treatment of partial acquisitions in order to see whether HSR coverage can be narrowed without sacrificing the usefulness of HSR as an antitrust enforcement tool.
This article comes in two parts. Part one outlines HSR treatment of partial acquisitions and suggests three major changes. Part two describes the rationale for and implementation of those changes.
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