On August 28, the US District Court for the Southern District of New York approved the proposed Stipulation and Order between the US Department of Justice (DOJ) and KKR & Co., in which the private equity firm agreed to pay a $250 million civil penalty for alleged violations of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The settlement resolves the government’s claims that KKR systematically violated the HSR Act in at least 16 transactions in 2021 and 2022.
The HSR Act requires parties to mergers, acquisitions, and other transactions above a certain size to submit a premerger filing with the US Federal Trade Commission and the DOJ’s Antitrust Division. Currently, violations of the HSR Act can result in civil penalties up to $53,088 per day.
The DOJ’s complaint against KKR, filed on January 14, 2025, alleged that KKR and numerous affiliated investment advisors and funds violated the HSR Act by failing to submit required business documents (known as “Item 4” documents) with premerger filings for at least 10 transactions, by deliberately altering documents before submitting them for at least eight transactions, and by failing to make premerger filings for at least two transactions.
With respect to at least two of the transactions, the DOJ asserted that omitted and altered documents concealed potentially anticompetitive “roll up” strategies, potentially resulting in higher prices and reduced competition. DOJ sought the maximum statutory penalty, more than $650 million total, for the 16 alleged violations.
The $250 million settlement is more than 20 times the amount of any prior HSR penalty obtained by the DOJ, due in large part to the alleged scope of violations over multiple transactions in prior years. The lawsuit and settlement demonstrate why it is important to work closely with legal counsel to implement a robust process to ensure compliance with HSR requirements for reportable transactions.