Non-Reportable ≠ Non-Reviewable: Antitrust Insights for Smaller US Mergers

Acquisitions of U.S. companies that fall below the $80.8 million Hart-Scott-Rodino (HSR) reporting threshold may pose unique risks to buyers. Unlike HSR reportable transactions, non-reportable transactions typically do not allow for contractual allocation of antitrust risk. The buyer is left shouldering the risk. A recent Federal Trade Commission (FTC) enforcement action confirms that the risk taken by buyers includes not only the possibility that the acquired assets will have to be divested, but also the possibility that the buyer will be forced to disgorge profits earned after the acquisition. For Mallinckrodt, the subject of the most recent consummated merger challenge, the disgorgement remedy was $100 million, on top of divestiture of part of the acquired assets.

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