On July 13, 2026, the U.S. Federal Trade Commission (the “FTC”) announced a proposed settlement under which Edwards Lifesciences Corp. (“Edwards”) and Genesis MedTech Group Limited (“Genesis”) would each pay fines of $10 million and $2 million, respectively, to resolve allegations that they failed to make a mandatory filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) prior to Edwards’ 2024 acquisition of JC Medical Inc. (“JC Medical”) from Genesis. According to the FTC, the combined $12 million penalty would be the largest ever imposed for failure to make an HSR filing. The proposed settlement remains subject to court approval.
The HSR Act’s Filing Requirements and Anti-Avoidance Rule. The HSR Act requires parties to transactions that meet certain annually adjusted thresholds to file premerger notifications with the FTC and DOJ (together, the “Agencies”) and observe a 30-day waiting period before closing a reportable transaction. The HSR Act also prohibits parties from structuring their transactions for the purpose of “avoiding” an HSR filing. Violations of the HSR Act, including violations of the anti-avoidance provision, are subject to civil penalties of currently $53,088 (adjusted annually) per day of noncompliance.
The Alleged Avoidance Device. According to the Complaint and the Press Release, in early 2024, Edwards began negotiating the acquisition of JC Medical, a medical device manufacturer. Internal documents showed that Genesis, the seller, valued JC Medical at approximately $125–150 million. Edwards acquired JC Medical in July 2024 for $115 million, plus future milestone payments of approximately $1.8 million. At the same time, Edwards agreed to acquire additional nonvoting Genesis shares for $25 million and in fact purchased the shares a few weeks later. The government alleges the evidence shows this investment constituted additional consideration for the acquisition of JC Medical, which pushed the size of the transaction above the then-applicable $119.5 million HSR threshold. The Complaint refers to internal emails, documents, and testimony treating the subsequent investment as part of the broader deal, reflecting a desire to keep the main transaction below the HSR threshold.
One day after closing on JC Medical, Edwards signed an agreement to acquire JenaValve Technology, Inc. (“JenaValve”).The Complaint alleges that JC Medical and JenaValve were the only companies conducting U.S. clinical trials for transcatheter aortic valve replacement device for aortic regurgitation, or “TAVR-AR,” and that Edwards was concerned that a mandatory review of the two acquisitions together could delay both. The FTC later obtained a preliminary injunction blocking the $945 million JenaValve acquisition, after which Edwards announced that it would no longer pursue the deal.
The Proposed Settlement. Under the proposed final judgment, Edwards is fined $10 million and Genesis $2 million in civil penalties for intentionally structuring the JC Medical transaction to avoid an HSR filing. As is typical in these cases, the parties settled for significantly less than the statutory maximum fine permitted (i.e., $53,088/day of violation). The proposed judgment also requires Edwards to notify the Agencies of all future acquisitions in the TAVR-AR space for a period of five years, regardless of the size of the transaction, and requires Edwards to create and maintain an internal antitrust compliance program.
Practical Implications. This settlement demonstrates that the Agencies continues robust enforcement of the HSR Act, including avoidance devices, and underscores that the Agencies examine the underlying economic substance of a transaction rather than its structure or labels used by the parties. When determining whether an HSR filing is required, parties should consider the entire commercial arrangement and assess whether nominally separate steps are, in substance, components of a single transaction.
Parties should involve sophisticated antitrust counsel early in the transaction-planning process to ensure compliance with the HSR Act, particularly when a proposed purchase price is near an HSR threshold, or the parties are considering modifications intended to remain below the threshold.
The Complaint also highlights how parties’ contemporaneous documents and communications can be used by the Agencies. The Complaint relies heavily on internal emails, term sheets and testimony indicating that the Genesis investment was part of the broader deal structure and that the parties sought to remain below the HSR threshold. Deal teams are advised to ensure that descriptions of transaction structure and HSR treatment are accurate, consistent and reviewed by counsel.
How Debevoise Can Help. Debevoise’s Antitrust and HSR team is ready to advise parties regarding the potential reportability of their transactions, as well as guide clients through the entire HSR filing process.
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