Edwards’ acquisition of JC Medical was structured with two components. On July 22, 2024, Edwards acquired JC Medical from Genesis for USD115m, then subsequently acquired USD25m of non-voting shares in Genesis on August 9, 2024.
The Agencies alleged that the USD25m investment in Genesis was additional consideration for JC Medical that, when added to the USD115m direct payment, would have exceeded the USD119.5m HSR size-of-transaction threshold then in effect. The Agencies alleged that the acquisition was subject to notification and waiting period requirements beginning on July 22, 2024, which would suggest the parties were in violation of the HSR Act for 721 days. With the current maximum civil penalty of USD53,088 per day, the USD12m penalty represents about 16% of the approximately USD77m penalty that the Agencies could have imposed (approximately USD38m for each defendant).
This settlement comes on the coattails of the FTC’s recent success in blocking Edwards’ proposed acquisition of JenaValve Technology, Inc. (“JenaValve”), an HSR-reportable transaction that Edwards signed the day after it closed the JC Medical deal. In that case, the U.S. District Court for the District of Columbia found that Edwards sought over a two-day period to acquire the only two potential competitors in the market for transcatheter aortic valve replacement for aortic regurgitation (TAVR-AR) devices: JC Medical, whose product was in clinical trials, and JenaValve.
In the Edwards/Genesis complaint, the Agencies referenced email correspondence between Edwards and Genesis that suggested the two components were part of a single transaction. Additionally, the FTC referenced documents and testimony to evidence that the transaction was intentionally structured to avoid an HSR filing, including an email between Edwards and JenaValve in which Edwards assured JenaValve that the JC Medical transaction was structured to be “below the threshold! Intentional[.]”
New civil penalty record
The last anti-evasion enforcement action under 16 C.F.R. § 801.90 was in 2019 and resulted in a USD5m settlement to be paid equally by both the buyer and the seller. Here, the USD12m penalty marks a drastic increase from prior record penalties and is unequally divided between Edwards and Genesis. The proposed final judgment orders Edwards to pay USD10m and Genesis to pay USD2m.
The Agencies also imposed a five-year term on the judgment during which Edwards will be required to follow prior notice and compliance requirements, increased from the three-year term in the 2019 16 C.F.R. § 801.90 judgment.
Beyond the size of the penalty, this enforcement action is also noteworthy because the Agencies have rarely sought anti-evasion enforcement actions. Despite emboldened rhetoric from both Democratic and Republican administrations, the 2019 enforcement action had been the only enforcement action in the 21st century in which the Agencies invoked the anti-evasion rule, 16 C.F.R. § 801.90, which provides that “[a]ny transaction(s) or other device(s) entered into or employed for the purpose of avoiding the obligation to comply with the requirements of the act shall be disregarded, and the obligation to comply shall be determined by applying the act and these rules to the substance of the transaction.”
Relatedly, this enforcement action also comes shortly after the FTC recently issued a Request for Public Comment related to potential modifications to the HSR Rules, which warned of “non-traditional transaction structures” and the use of 16 C.F.R. § 801.90 in reviewing these transactions which often do not require HSR filings.2
While this enforcement action does not address the reportability issues presented in “acquihire” or “reverse acquihire” transaction structures prominently featured in the Request for Public Comment,3 it nevertheless showcases the Agencies’ use of its existing anti-evasion toolkit in traditional transaction structures involving a 100% acquisition of a business paired with a consideration structure that on its face would not meet the HSR Act size of transaction threshold.
FTC Chairman Andrew N. Ferguson framed the action in unambiguous terms, warning that “[c]ompanies that try to sneak deals through without lawful FTC review should take notice” and that the FTC “will not hesitate to seek penalties” for HSR Act violations.4 The message is consistent with the Agencies’ broader posture that they are vigilant for HSR Act violations irrespective of whether a deal ultimately raises competitive concerns. It also fits within recent heightened scrutiny of healthcare and medical-device transactions, which are being closely scrutinized by the current Administration.5
Additional settlement terms
In addition to the civil penalties, the proposed final judgment orders Edwards, for the five-year term of the judgment, to give the Agencies at least 30 days advance written notice before acquiring any interest in any firm that sells, is in U.S. clinical trials for, or holds an FDA Investigational Device Exemption for a TAVR-AR device.
To comply with these prior notice requirements, Edwards must implement an antitrust compliance program. Edwards must designate an internal antitrust compliance officer, distribute the judgment to relevant individuals involved in business development, strategic planning, or M&A, provide recurring training, and obtain annual written certifications of compliance from certain covered personnel. As part of the settlement, the Agencies maintain broad inspection rights over Edwards’ records and personnel, and any future enforcement proceeding against Edwards is agreed to be reviewed by a preponderance of the evidence standard.
Key takeaways and practical considerations for transacting parties
Deal teams should treat the HSR size-of-transaction analysis as a substance-over-form exercise and account for all related and subsequent consideration when assessing whether an HSR filing is required. Under the two-prong test of the 16 C.F.R. § 801.90 anti-evasion rule, when the Agencies have identified an intent to avoid the HSR Act requirements, they have broad discretion to “[apply] the act and the rules to the substance of the transaction.”
In other words, notwithstanding the characterization of the buyer’s USD25m non-voting investment in the seller, the Agencies evaluated the overall circumstances—Edwards’ two substantially concurrent closings of the USD115m sale and the USD25m investment—and determined that the “substance” of the sale of JC Medical to Edwards was a transaction that exceeded the USD119.5m HSR size-of-transaction threshold then in effect.
Finally, as both buyers and sellers have an independent HSR filing obligation, both buyers and sellers also bear HSR Act evasion risk. Although Edwards will pay a higher civil penalty, the Agencies still imposed a significant USD2m penalty on the seller.
If you have any questions concerning this client alert, please contact a member of A&O Shearman’s Antitrust practice.
Footnotes
1 See Complaint, United States v. Edwards Lifesciences Corp. & Genesis Medtech Group Limited, No. 1:26-cv- 02450 (D.D.C. July 13, 2026); Proposed Final Judgement, United States v. Edwards Lifesciences Corp. & Genesis Medtech Group Limited, No. 1:26-cv-02450 (D.D.C. July 13, 2026).
2 Fed. Trade Comm’n, Request for Public Comment Regarding Making Improvements to the Premerger Notification and Report Form (Mar. 24, 2026), https://www.regulations.gov/document/FTC-2026-0298-0001.
3 Id. at 2-3, 6.
4 Press Release, Fed. Trade Comm’n, FTC Secures $12 Million in Penalties for Pre-Merger Reporting Act Violations (July 13, 2026), https://www.ftc.gov/news-events/news/press-releases/2026/07/ftc-secures-12-million-penalties-pre-merger-reporting-act-violations.
5 See client alert, U.S. merger enforcement in the pocketbook era: Healthcare and consumer-facing deals are drawing heightened antitrust scrutiny dated July 1, 2026, https://www.aoshearman.com/en/insights/us-merger-enforcement-in-the-pocketbook-era-healthcare-and-consumerfacing-deals; see also client alert, The HSR rollercoaster: form revisions, unexpected reversals, reportability reconsiderations, and the road ahead dated June 22, 2026, https://www.aoshearman.com/en/insights/the-hsr-rollercoaster-form-revisions-unexpected-reversals-reportability-reconsiderations-and-the.
