The U.S. Justice Department is requiring KKR & Co. to pay a civil penalty of $250 million to resolve allegations that it repeatedly flouted the pre-merger antitrust review process.
The complaint alleged that KKR evaded antitrust scrutiny for at least 16 separate transactions by failing to comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).
“This historic $250 million civil penalty – more than 20 times any prior HSR penalty obtained by the DOJ – sends a powerful message: the Department is committed to vigorous enforcement of the Act,” Associate Attorney General Stanley Woodward Jr. said. “The Act’s requirements protect competition by giving the Justice Department an opportunity to investigate potentially unlawful transactions. Companies that disregard their legal obligations will face serious consequences.”
The HSR Act requires parties to a merger, acquisition, or other transaction above a certain size to submit a pre-merger filing to the Department of Justice’s Antitrust Division and the Federal Trade Commission. This is required to prohibit mergers and acquisitions that threaten to harm competition. As a sophisticated private equity firm, KKR is familiar with the HSR Act and its requirements, according to the DOJ. Since 2021, KKR was required to make more than 100 pre-merger filings under the HSR Act.
The complaint alleged that in 2021-2022, KKR failed to make complete and accurate pre-merger filings for at least 16 transactions. Specifically, KKR violated the HSR Act by altering documents in HSR filings for at least eight of those transactions, failing to make any HSR filing for at least two of those transactions. The DOJ also alleged that KKR systematically omitted required documents in HSR filings for at least 10 of those transactions.
The HSR Act authorizes civil penalties for violations of the Act at more than $50,000 per day per violation. The proposed $250 million penalty is the largest civil penalty ever assessed for violating the HSR Act.
KKR is a global investment firm headquartered in New York, New York, with over $744 billion in total assets under management.