FTC Targets Below-Threshold Deal Structure With “Largest Ever” Merger-Reporting Penalty
On July 13, 2026, the Federal Trade Commission announced a $12 million settlement of charges that Edwards Lifesciences Corp. acquired a medical-device maker without complying with the Hart-Scott-Rodino Act’s (HSR) notification and waiting-period requirements. According to the complaint, Edwards and Genesis intentionally structured the deal to avoid HSR compliance.
The settlement is notable not only for imposing the “largest ever” civil penalty for such a violation, but also for how the agency framed the conduct. FTC Chairman Andrew N. Ferguson warned that “companies that try to sneak deals through without lawful FTC review should take notice,” adding that “the FTC will be vigilant in enforcing the requirements of the Hart-Scott-Rodino Act and we will not hesitate to seek penalties for its violation.”[1]
Those comments, along with the penalty, signal that the FTC views alleged HSR avoidance as an enforcement priority, especially where transaction structure, timing, or related investments appear designed to keep a deal outside premerger review.
The Deal Structure and Timing
The at-issue transaction involved Edwards Lifesciences Corp.’s acquisition of medical-device maker JC Medical from Genesis MedTech Group. According to the FTC, Edwards was concerned that HSR review “would significantly delay closing on the acquisition of JC Medical, especially in light of its concurrent negotiations to acquire JenaValve” in a separate deal.[2]
The FTC alleged that, to avoid HSR review, Edwards and Genesis agreed Edwards would pay $115 million, plus milestone payments, for JC Medical—“just below the minimum size-of-transaction threshold of $119.5 million required at the time to trigger HSR review.”[3] But Edwards also agreed to make a contemporaneous $25 million investment in Genesis in connection with the JC Medical acquisition. In the FTC’s view, “in substance, the transactions between Edwards and Genesis met the thresholds for mandatory reporting under HSR” because “the combination amounted to more than $119.5 million.”[4]
The FTC also alleged that, one day after Edwards acquired JC Medical without making an HSR filing, Edwards attempted to acquire JC Medical’s only competitor, JenaValve Technology. The FTC alleged that, had the JenaValve transaction succeeded, Edwards “would have owned the only two companies in the United States with TAVR-AR devices in clinical trials.”[5] The FTC had separately challenged Edwards’ proposed JenaValve acquisition as anticompetitive, and a federal district court granted the FTC’s request for a preliminary injunction in January 2026.
The Record Civil Penalties and Other Relief
Under the terms of a proposed final judgment, Edwards and JC Medical will pay a $10 million penalty, and Genesis will pay a $2 million penalty. The proposed final judgment also includes a forward-looking restriction that “Edwards will not, without providing advance written notification to the FTC, acquire, directly or indirectly, through subsidiaries or otherwise, any ownership interest, in whole or in part, in any firm that:
Commercially sells a TAVR-AR device in the United States;
Is engaged in clinical trials in the United States for a TAVR-AR device; or
Has received an Investigational Device Exemption from the U.S. Food and Drug Administration to conduct clinical trials on a TAVR-AR device in the United States.”[6]
Edwards must also “design, maintain and operate an antitrust compliance program to ensure compliance with the final judgment and the antitrust laws.”[7]
Key Takeaways for Dealmakers
For dealmakers, the message is straightforward: transactions structured to fall just below HSR thresholds may still draw scrutiny if the agencies believe the combined monetary terms, timing, or related arrangements show an effort to avoid review.
The FTC’s focus on the $115 million purchase price, the then-applicable $119.5 million threshold, and the alleged contemporaneous $25 million investment underscores that parties should evaluate the substance of related deal components, not merely the formal label assigned to each payment or investment. The case also illustrates that non-reportable, or allegedly non-reportable, transactions can become enforcement targets when connected to parallel acquisitions involving close or emerging competitors.
The practical takeaway is that HSR analysis should be integrated early into transaction planning, particularly in serial acquisition strategies, innovation markets, and industries where pipeline assets may be competitively significant before commercialization. Parties should document the business rationale for transaction structures, assess whether related payments or investments should be aggregated for HSR purposes, and consider whether a “below-threshold” structure could later be portrayed as an effort to “sneak deals through without lawful FTC review.”
The FTC’s announcement makes clear that HSR compliance is not a technical afterthought. It is an enforcement issue that can result in significant civil penalties, prior-notice obligations, and compliance-program requirements.
If you have questions about this Client Alert or are interested in additional details or guidance, please reach out to Adam M. Acosta (adam.acosta@pierferd.com) or your regular PierFerd contact for assistance.
This publication and/or any linked publications herein do not constitute legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, the author(s) and PierFerd assume no liability whatsoever in connection with its use. Pursuant to applicable rules of professional conduct, this publication may constitute Attorney Advertising. © 2026 Pierson Ferdinand LLP.
[1] FTC Secures $12 Million in Penalties for Pre-Merger Reporting Act Violations, FTC Press Release (July 13, 2026), https://www.ftc.gov/news-events/news/press-releases/2026/07/ftc-secures-12-million-penalties-pre-merger-reporting-act-violations.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Proposed Final Judgment, United States v. Edwards Lifesciences Corp. et al., No. 1:26-cv-2450 (D.D.C. July 13, 2026), ECF 1-3.
[7] Id.
