FTC and DOJ Secure $12 Million Settlement for HSR Act Violations in Edwards/JC Medical Deal

On July 13, 2026, the U.S. Department of Justice (DOJ), acting on behalf of the Federal Trade Commission (FTC), filed a complaint and proposed final judgment in the United States District Court for the District of Columbia against Edwards Lifesciences Corporation (Edwards) and Genesis MedTech Group Limited (Genesis), alleging that the parties structured Edwards’ acquisition of JC Medical, Inc. (JC Medical) to avoid complying with the notification and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). Under the terms of the proposed settlement, Edwards will pay a $10 million civil penalty and Genesis will pay a $2 million civil penalty — which together constitute the largest civil penalty the agencies have obtained for a failure to file under the HSR Act. The settlement follows the FTC’s successful challenge, discussed in our February 2026 Advisory, to Edwards’ proposed acquisition of JenaValve Technology, Inc. (JenaValve), which the district court enjoined in January 2026.

Together, the two matters illustrate the agencies’ continued focus on acquisitions of pre-commercial pipeline medical technology and strict enforcement of the HSR Act’s reporting requirements. Notably, this settlement is also one of the rare instances in which the agencies have imposed civil penalties on both the buyer and the seller, reflecting their conclusion that both Edwards and Genesis were culpable in structuring the deal to avoid HSR review. The FTC contended that Genesis’ own failure to file constituted a violation of the HSR Act.¹

Background of the Transaction

According to the complaint, on July 22, 2024, Edwards, a global cardiac device manufacturer, agreed to acquire JC Medical from Genesis for $115 million, plus milestone payments with an ostensible value of approximately $1.8 million.² JC Medical was, at the time, engaged in U.S. clinical trials for a transcatheter aortic valve replacement device to treat aortic regurgitation (a TAVR-AR device). Edwards closed the JC Medical acquisition the same day it was signed, without submitting a filing under the HSR Act and without observing the Act’s statutory waiting period.³ The parties did not publicly announce the transaction at that time.

Contemporaneously with the JC Medical acquisition, Edwards agreed to invest $25 million in non-voting securities of Genesis itself.⁴ The complaint alleges that Edwards and Genesis viewed the JC Medical purchase price and the Genesis investment as part of a single, integrated deal — negotiated together and documented in term sheets transmitted in a single email — but treated them as legally separate transactions for HSR purposes so that neither, viewed in isolation, would meet the HSR Act’s then-applicable $119.5 million reporting threshold.⁵ Had the two payments been aggregated, the complaint alleges, the transaction value would have exceeded the “size of transaction” threshold and triggered a mandatory HSR filing and waiting period.⁶

The very next day, July 23, 2024, Edwards agreed to acquire JenaValve — JC Medical’s only competitor in the development of TAVR-AR devices — for $945 million.⁷ The complaint alleges that, in acquiring both companies, Edwards sought to own “the only two companies in the United States with TAVR-AR devices in clinical trials.”⁸ Notably, JenaValve was not aware, at the time it agreed to be acquired, that Edwards had already acquired JC Medical.⁹

As discussed in our February 2026 Advisory, the FTC separately challenged Edwards’ proposed acquisition of JenaValve under Section 7 of the Clayton Act, and on January 9, 2026, Judge Rudolph Contreras of the U.S. District Court for the District of Columbia granted the FTC’s request for a preliminary injunction blocking that deal.¹⁰ The parties abandoned the transaction shortly thereafter.

HSR Filing Requirements and the Prohibition on Structuring to Avoid Review

The HSR Act requires parties to an acquisition of voting securities or assets that exceeds certain dollar thresholds — $119.5 million at the time of the JC Medical transaction — to file premerger notification with the FTC and DOJ and to observe a statutory waiting period before closing.¹¹ The purpose of the notification and waiting period is to give the antitrust agencies an opportunity to review a transaction, and, where warranted, to seek an injunction, before the parties consummate an anticompetitive acquisition.

The HSR Rules contain an explicit anti-avoidance provision, 16 C.F.R. § 801.90, which provides that any transaction or device entered into for the purpose of avoiding the Act’s filing obligations “shall be disregarded,” and that reportability is instead determined by applying the HSR Act to the substance of the transaction.¹² Relatedly, where the acquisition price for voting securities has been determined, that price generally sets the transaction value for HSR purposes, and the value must reflect the full consideration paid for the securities, regardless of the form in which that consideration is delivered.¹³

Applying these principles, the complaint alleges that the $25 million Genesis investment was, in substance, additional consideration for JC Medical rather than an independent transaction, and that Edwards’ own communications acknowledged the JC Medical deal was structured to stay “below the threshold” intentionally.¹⁴ Because the aggregated consideration exceeded $119.5 million, the government alleges the transaction was reportable under the HSR Act notwithstanding its bifurcated form.

Key Terms of the Settlement

The Commission voted 2-0 to accept the proposed settlement and refer the matter to DOJ, which filed the complaint and proposed final judgment on the FTC’s behalf on July 13, 2026. Key terms of the proposed final judgment,¹⁵ which is subject to review by the court, include:

• Civil penalties. Edwards will pay a $10 million civil penalty and Genesis will pay a $2 million civil penalty — together described by the FTC as the largest combined penalty ever obtained for an HSR filing failure.
• Prior notification requirement. For five years, Edwards must provide 30 days’ advance written notification to the FTC — on the standard HSR Notification and Report Form, but without a filing fee and without notice to DOJ — before acquiring any ownership interest in a firm that (i) commercially sells a TAVR-AR device in the United States, (ii) is engaged in U.S. clinical trials for a TAVR-AR device, or (iii) holds an FDA Investigational Device Exemption to conduct such trials. If the FTC requests additional information during the 30-day period, Edwards must wait a further 30 days after responding before closing.
• Antitrust compliance program. Edwards must designate an antitrust compliance officer, distribute the final judgment, and provide training to relevant officers, directors, and employees with responsibility over business development, strategic planning, or M&A, and obtain periodic written certifications of compliance.
• Compliance inspection and enforcement. The judgment gives DOJ and the FTC ongoing rights to inspect records and interview personnel, and preserves the government’s right to seek contempt remedies, an extension of the judgment, and recovery of its enforcement costs for violations occurring even after the judgment’s term.
• No admission of liability. Entry of the final judgment does not constitute an admission or finding of wrongdoing, and Edwards and Genesis deny any violation of law.

Practical Takeaways

The Edwards/JC Medical settlement, read together with the JenaValve injunction, offers several lessons for parties structuring acquisitions — particularly in life sciences and other innovation-intensive industries where competitively significant assets may still be in development:

• Substance governs over form. Parties cannot avoid the HSR Act’s notification and waiting period requirements by dividing a single economic transaction into formally separate pieces — here, an acquisition price and a contemporaneous investment — each priced to fall below the reporting threshold. Where related transactions are negotiated together, documented together, and intended to compensate for the same asset, there is a risk that the agencies will assert they should be aggregated.
• Engage antitrust counsel early to evaluate aggregation risk. Whenever a transaction includes minority investments, licensing arrangements, earnouts, or other consideration flowing between the same or related parties at or near the same time as a primary acquisition, clients should consult antitrust counsel before signing to assess whether those arrangements should be aggregated with the primary transaction for HSR valuation purposes — and, if so, whether the combined transaction is reportable. This analysis is fact-intensive and turns on the parties’ contemporaneous documents and communications, which the agencies will scrutinize closely after the fact.
• Structuring to avoid review compounds risk rather than reduces it. Avoiding HSR review for the JC Medical deal did not prevent scrutiny as the agencies are free to investigate and seek enforcement against deals that are not reportable. Here, FTC used the failure to file the JC Medical transaction against Edwards in the preliminary injunction proceeding, claiming it was an implied admission that the simultaneous JenaValve acquisition would raise antitrust risk.¹⁶

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.