Making an example of KKR in the US: private equity firms on notice about new merger laws

The US Department of Justice (DoJ) has recently filed a lawsuit against private equity firm KKR &Co. (KKR) alleging that KKR repeatedly failed to comply with information and document requirements under mandatory merger notification laws and closed transactions prior to regulatory approvals in breach of the law.

The DOJ seeks civil penalties in excess of US$650 million, representing the largest civil penalty action the DoJ has ever brought under the relevant merger notification law.

With the imminent introduction of a mandatory notification regime for transactions in Australia, this case is a strong reminder that private equity firms will need to ensure they understand the new regime and implement strict compliance across their teams.

Mandatory filing regime in the US

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) governs the mandatory notification and review process for proposed acquisitions in the US that meet the monetary thresholds. 

The HSR Act requires merging parties for transactions valued at US$119.5 million or above must submit an HSR form to both the Antitrust Division of the DoJ and the Federal Trade Commission (FTC) disclosing information and documents about the emerging parties and transaction. The merger parties must not close the transactions until the end of the statutory waiting period (or additional periods as required by the FTC and DoJ).  

The case brought by the DoJ

KKR is a global investment firm headquartered in New York. It is one of the world’s largest investment firms with over US$500 billion in total assets under management. Since 2021, it has submitted over 100 HSR filings for transactions that met the monetary thresholds. 

The DoJ commenced an investigation into KKR in 2022 in relation to at least 16 HSR forms that it had submitted, and filed the civil suit on 14 January 2025. 

The DoJ alleges that between 2021 and 2022:

• KKR certified it had complied with the HSR Act but had failed to submit required business documents with its HSR filings for at least 10 separate transactions. These omissions were likely deliberate and evidence systematic conduct.  In more than one of the transactions, documents were not submitted at the time of the HSR filing, but were only identified after the DoJ commenced its investigation. In another instance, KKR failed to amend a filing to include relevant documents identified and the omission of which was notified to KKR by external counsel;
• KKR altered documents before supplying them for HSR filings, specifically altering information about the impacts of the proposed transaction on competition for at least eight separate transactions. In one instance, a presentation deck prepared by KKR’s Investment Committee was altered and the ‘Competitive Behaviour’ section deleted entirely before submission to the DoJ; and
• KKR failed to make the required HSR filing before closing transactions on at least two separate occasions. These acquisitions were valued at US$6.9 billion and US$919 million, respectively.

The DoJ noted a ‘pervasive culture of non-compliance’ within KKR’s investment business, as senior personnel were aware of, and even instructed and encouraged, more junior members to engage in conduct to evade scrutiny of its proposed transactions. This was particularly concerning to the DoJ given that KKR is one of the oldest, largest and most sophisticated private equity firms in the US, that has been subject to the HSR Act for nearly 50 years in relation to hundreds of transactions it has been involved in. 

KKR’s defence – a countersuit against the DoJ

KKR has countersued the DoJ and alleges:

• the DoJ only filed its suit to further political goals of reducing merger and acquisition activity which it is implementing through imposing strict liability penalties for alleged non-wilful violations of FTC rules;
• KKR did not violate the HSR Act and the FTC and DoJ’s interpretations of the HSR Act are unconstitutionally vague; and
• the penalty sought by the DoJ of US$51,000 per day for the filing errors ‘in perpetuity’ is removed from the HSR Act and excessive, as well as unconstitutional under the Fifth and Eighth Amendments.

In addition to seeking a penalty if US$650 million, the DoJ has sought orders:

• to enjoin KKR from any future violations of the HSR Act;
• for equitable relief, such as disgorgement of the unlawful financial gains as a result of closing transactions that ought not to have been closed; and
• for any other relief, such as structural and behavioural relief (including compliance measures).

The new merger laws

From 1 January 2026, Australia will commence a mandatory notification regime for transactions that breach certain turnover and value thresholds (read more in our earlier article). 

If you would like a briefing for your team on the new laws, please contact Sar Katdare on +61 2 8274 9554 or sar.katdare@jws.com.au.