State Antitrust Laws and M&A: Increased Scrutiny, Common Themes, Key Differences, Regulatory Strategies, Risk Mitigation

Description

In the last several years, a growing number of states have enacted or are considering enacting various legislative and regulatory changes that would increase antitrust scrutiny for a variety of business transactions. These state-level regulations share similarities with the federal Hart-Scott-Rodino Act (HSR Act) in that they require parties to certain transactions to notify and seek clearance from state authorities prior to closing their transactions.

To date, 15 states, including California and New York, have HSR-like notice regimes. While almost all of these laws are specifically directed at healthcare transactions, state antitrust scrutiny already extends to other sectors, and it is expected that new laws will require notice of non-healthcare transactions in the future.

To encourage states to impose transaction notice requirements that are consistent with existing federal HSR obligations, in July 2024, the Uniform Law Commission (ULC) approved the Uniform Antitrust Pre-Merger Notification Act. The Act is intended as model legislation for states to use to implement pre-merger filing regimes and, according to the ULC, creates a simple, non-burdensome mechanism for state attorneys general to receive access to HSR filings at the same time and under the same confidentiality obligations as the federal agencies.

State antitrust laws add an additional layer of regulatory requirements for merging parties to consider, and they are expected to increase transaction timelines, costs, and risks. It is imperative that counsel and merging parties comply with state antitrust requirements as failure to do so may result in substantial fines or enforcement actions.

Listen as our panel of antitrust experts reviews the current framework of state antitrust laws and provides guidance for navigating state-specific merger notification regimes.