FTC says reviews of mergers and acquisitions can be initiated even after statutory deadlines
Hospitals and health systems also can expect reviews to become more rigorous after a recent White House executive order.
The Federal Trade Commission has alerted organizations pursuing mergers and acquisitions that such transactions are subject to regulatory actions even if a review is not completed in a timely manner.
In a blog post dated Aug. 3, Holly Vedova, director of the FTC’s Bureau of Competition, wrote that a surge of merger filings across industries has made it difficult for the FTC (or Department of Justice) to complete a review of pending transactions in the time frame prescribed by the Hart-Scott-Rodino Act.
Even if the FTC fails to meet the statutory deadlines, Vedova wrote, the agency retains the right to complete its review. Organizations can expect to receive a form letter stating that the “investigation remains open” and that “the agency may subsequently determine that the deal was unlawful.”
She continued, “Companies that choose to proceed with transactions that have not been fully investigated are doing so at their own risk.” In other words, the FTC still may find that the merger or acquisition is illegal and seek to undo the transaction.
The blog post was published not long after a sweeping executive order issued by President Joe Biden in an effort to promote competition in various industries. One of the edicts specific to healthcare was for the FTC and DOJ to “review and revise their merger guidelines to ensure patients are not harmed by such mergers.”
The information in the blog post doesn’t constitute any such revisions but is another indication that reviews may become more exacting.