The Merger Before the Merger

Introduction

A corporate merger is a corporate transaction, but from a legal perspective it represents a sequence of events that occur before the deal can close. Federal law requires certain buyers and sellers to notify antitrust regulators of large mergers and acquisitions before the deal is finalized, giving regulators an opportunity to determine whether the transaction could harm competition.¹

That process is now in the spotlight of a historic enforcement action against private-equity giant KKR. On August 26, 2026, the Justice Department announced a proposed $250 million settlement to resolve allegations that KKR violated the Hart-Scott-Rodino Act by failing to report, omitting, or altering documents related to at least 16 transactions between 2021 and 2022.¹ KKR denies the government's assertions and claims to have acted in good faith.²

The question of what constitutes a sufficient showing extends beyond KKR: how much information must a company give the government before it can proceed with a major transaction?

The Law Before the Deal

The Hart-Scott Rodino Antitrust Improvements Act of 1976 established a mandatory premerger notification program, under which parties to certain transactions must file information with the Federal Trade Commission and the Department of Justice and wait out a review period before completing the deal.³

The purpose is logical: Traditional enforcement actions allow antitrust regulators to act only after a transaction has been completed but there is often no way to unwind a merger. Accordingly, the law creates an opportunity for regulators to take a look before a deal is finalized, and to block it if necessary.

Notably, a premerger filing is not a determination of legality; it is merely an opportunity for the government to obtain information about whether a transaction may have antitrust consequences. Specifically, the filing allows the government to assess whether the transaction violates Section 7 of the Clayton Act, which generally forbids any acquisition that may substantially lessen competition or tend to create a monopoly.⁴

The very fact that the government must obtain information through a filing makes the content of the filing a particularly sensitive issue.

What the Government Says KKR Did

The government's case alleges that KKR repeatedly failed to fulfill the requirements of a filing. According to the government's complaint, KKR was required to make more than 100 HSR filings beginning in 2021.¹ However, the DOJ alleges that KKR made "incomplete or inaccurate filings" with regard to at least 16 transactions. The allegations against KKR fall into three general categories: omission of required documents, failure to make required filings, and alteration of documents prior to filing. According to the government's complaint, KKR failed to include required documents in at least ten of the transactions, completely failed to make a required filing in at least two, and altered documents for at least eight of the filings before submitting them to the government.¹ KKR has contested the government's position with regard to each of these allegations, and agreed to the $250 million settlement while denying any wrongdoing.²

That distinction is an important one; the $250 million penalty is a civil settlement, not a criminal penalty, and far from convicting KKR of monopolization, the government is merely asserting that its failure to make the required filings impeded the government's ability to perform its mandated duties to review the transactions.

Why Documents Matter

A HSR filing contains more than the basic information about the buyer and the seller. The government has argued that certain internal documents of the parties to a transaction can provide information about the transaction's potential impact on competition. The DOJ and FTC have each discussed the value of internal documents, including analysis performed by the parties regarding the likely competitive effects of a transaction.⁵

If documents that appear to be relevant to a transaction are missing from a filing, or if a company alters those documents in some way, the result is that the government is making a determination based on an incomplete or incorrect set of facts compared to what actually exists within the company itself.

The government's argument, therefore, rests on more than an assertion that KKR made relatively minor mistakes. It rests in part on the proposition that the failure to submit documents necessary for the government to make its own determination can render the government unable to determine whether a transaction violates the antitrust laws.

Why Private Equity Is Different

The controversy over KKR's conduct also raises an interesting question about how enforcement actions are applied to different kinds of companies. Traditional corporations may make a merger or acquisition deal occasionally, but private-equity firms are in the acquisition and disposition business, buying and selling companies as a routine matter of operations

That practice creates a potential difference between a company that occasionally buys another company and one that does it dozens of times per year: Does the government apply different standards to companies that understand the antitrust laws and the process for navigating them?

The law itself does not distinguish between companies in considering their obligations under the HSR Act. However, a firm such as KKR may have more of an impact on the government's enforcement priorities due to the sheer number of its transactions

The DOJ has pointed out that KKR is a "sophisticated private equity firm" with over $744 billion in assets and significant experience with the premerger process, meaning that it should clearly understand the relevance of the requirements it allegedly violated.¹

That fact creates a separate enforcement issue: should firms that participate in the process multiple times be held to a higher standard with regard to compliance with the process? The government's position is that the answer is clearly yes.

The Price of Noncompliance

Violations of the HSR Act are subject to significant civil penalties.³ The $250 million settlement with KKR is the largest fine ever issued to a company for violating the HSR Act, according to the DOJ.¹

The size of the fine serves two purposes. First, it serves as a penalty for the violations that the government has alleged. Second, it serves as a deterrent to other companies that might consider similar noncompliant conduct. After all, if the threat of a fine is not enough to make companies follow the law, there is little point in having the law in the first place.

However, this reasoning leads to a related concern. A fine must be significant enough to qualify as a meaningful penalty, but it must not be so greatly out of proportion with the violation that it becomes a pointless exercise in extravagant punishment.

KKR's case raises a significant question about enforcement that extends to the larger issue of the government's ability to prove a violation of antitrust law: how much should companies be fined for failing to report information to the government, when the government cannot prove that the transactions themselves were unlawful?

Failure to file a pre merger notification is not in and of itself an antitrust violation, but it may be a factor in determining whether a particular merger or acquisition has antitrust consequences. The issue of a company's potential liability for failing to make a filing, therefore, deserves close examination.

Disclosure ≠ Approval

The HSR process and the pre merger review more generally can be confusing to some companies in that they appear to function as an approval process. In reality, however, the premerger review is simply a method for enabling the government to evaluate a transaction for antitrust purposes.

It is important to note that a filing does not ensure that a deal will proceed; even after a waiting period has expired, the government still has the authority to challenge a merger or acquisition on antitrust grounds. The government has other enforcement tools at its disposal, which means that while regulators do not need to approve a transaction before it can take place, they retain the ability to review it in detail after the fact.

This distinction is significant because the KKR case is not about whether any particular merger was anticompetitive but rather about whether the government was adequately informed about the transactions to make that determination.

Therefore, the government's argument is essentially that even if none of the 16 allegedly problematic transactions were ultimately found to violate Section 7, KKR's alleged conduct impaired the ability of the government to make that determination.¹

In other words, the government can still enforce the HSR Act even if there is no proof that KKR would have had to defend itself against an antitrust lawsuit.

Why It Matters

The Merger Before the Merger is a useful discussion of a current controversy with regard to government antitrust enforcement, but it is more than that; it is an important illustration of the way in which antitrust laws in general and the HSR Act in particular function

The government is unable to evaluate a transaction that it does not understand, so Congress mandated a process by which companies must provide information to the government before a merger or acquisition can proceed.³

The KKR case demonstrates the government's willingness to obtain that information, and the consequences that a company may suffer for its failure to do so.¹ At the same time, the case illustrates the nuance that must be taken in distinguishing between noncompliance with regulatory processes and actual antitrust violations. KKR is prepared to pay a considerable penalty, but the settlement itself does not establish that any of the transactions in question were anticompetitive.²

The question of whether such violations should be punished at all is a more general one: can a company's noncompliance with disclosure requirements be considered a sufficient regulatory violation to warrant a penalty?

As a matter of current law, the answer appears to be yes. However, the circumstances of KKR's case raise a number of interesting questions for the future of antitrust law and regulation.

Conclusion

Mergers begin long before two companies become one. They begin with disclosures, and the government takes that responsibility seriously. The Hart-Scott-Rodino Act establishes a review process that effectively gives the government an opportunity to examine a transaction before it can proceed. This process reflects a fundamental truth of antitrust law: the government should not be required to enforce the antitrust laws in a vacuum.³

The KKR case is a useful illustration of the way in which the government can use its authority to obtain information about a transaction, even one that appears relatively uncontroversial. The record-setting $250 million fine serves as a warning that the government views the mandatory premerger notification process as an essential element of antitrust enforcement.¹

However, the case leaves a larger question for the future: as private-equity firms continue to make large numbers of acquisitions, how severe should the consequences be for companies that fail to comply with the disclosure requirements? The government cannot evaluate what it cannot see, so regulators have a responsibility to be sure that they are seeing enough information to make an accurate determination. Before regulators can determine whether a merger should take place, the law requires them to be able to see the deal first.

1. U.S. Department of Justice, KKR Agrees to Pay Record $250M Penalty for Serial Violations of Federal Premerger Review Law (Aug. 26, 2026).

2. KKR Settles US Antitrust Case Accusing It of Merger Filing Violations for $250 Million, Reuters (Aug. 27, 2026). Reuters reported that KKR disputes the DOJ's characterization and maintains that its conduct was in good faith.

3. Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a.

4. Clayton Act § 7, 15 U.S.C. § 18.

5. American Bar Association, DOJ Sues Private Equity Firm KKR & Co. for Alleged “Rinse-and-Repeat” Violations of HSR Act, discussing the importance of required HSR documents to DOJ and FTC review.