KKR & Co. Inc., a prominent private equity firm with over $500 billion in assets under management, has agreed to pay a record civil penalty of $250 million to settle a lawsuit filed by the U.S. Department of Justice (DOJ). The lawsuit, initiated on January 14, 2025, in the U.S. District Court for the Southern District of New York, accused KKR of violating the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 by making improper pre-merger filings for at least 16 transactions between 2021 and 2022. This settlement allows KKR to avoid a potentially much larger fine, as the DOJ had been seeking over $650 million in penalties for these violations.
The DOJ's complaint detailed several types of violations, including KKR's alleged failure to provide all required documents, altering documents to omit antitrust-sensitive content, and not making required HSR filings for two significant acquisitions valued at $6.9 billion and between $376 million and $919 million, respectively. For instance, in a 2021 acquisition of Emsi for approximately $350 million, KKR allegedly omitted 28 crucial documents, including those assessing competition between Emsi and a KKR portfolio company, Burning Glass. These omissions and alterations purportedly denied the DOJ and Federal Trade Commission (FTC) the opportunity to properly review transactions for anti-competitive effects before closing.
Before the settlement, KKR faced daily penalties of $51,744 for each day of violation, accumulating to thousands of days of non-compliance across multiple transactions. The DOJ characterized KKR's actions as "serial violations" and "systemic failures," asserting that KKR benefited from these violations, generating millions of dollars in revenues. The settlement of $250 million, while substantial, is less than the maximum $650 million the DOJ had sought, underscoring the severity of the allegations and the financial implications of non-compliance with HSR regulations. This case serves as a stark reminder for all transacting parties to meticulously adhere to HSR filing obligations, especially as more stringent requirements are anticipated.
