What is the Hart-Scott-Rodino Act?

The Hart-Scott-Rodino Act, also known as the Premerger Notification Program, is a federal antitrust law that was enacted in 1976 and governs mergers and acquisitions. The purpose of this law is to ensure that large-scale business combination transactions are made in compliance with antitrust laws. In order for the law to take effect, parties to a proposed merger or acquisition must inform the Federal Trade Commission (FTC) and the US Department of Justice of their transaction. In Texas, the Premerger Notification Program applies to mergers and acquisitions of a certain size, and when those transactions involve companies doing business in the state. Companies must file notification forms to the FTC and the Department of Justice if they meet the size and jurisdictional requirements of the Hart-Scott-Rodino act. If the FTC or the Department of Justice is concerned that the proposed transaction may reduce competition, they may require that the parties to the transaction provide more information or divest some of their assets in order to be approved. The Hart-Scott-Rodino Act seeks to protect consumers by ensuring that large-scale business transactions are made in compliance with appropriate antitrust laws. It also sets forth notification requirements that must be followed in order for transactions to be approved. Companies doing business in Texas should be aware of the size and jurisdictional requirements of the Premerger Notification Program in order to comply with the law.

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