On January 19, the Federal Trade Commission (FTC) announced the annual changes to the thresholds of the Hart-Scott-Rodino Antitrust Improvements Act (the HSR Act). These thresholds are adjusted annually based on changes in the U.S. gross national product (GNP). The changes are expected to become effective in mid-February 2017, 30 days after notice is published in the Federal Register.
Generally, the HSR Act requires notification for mergers or acquisitions over a certain size among parties over a certain size. The size-of-transaction threshold will increase to $80.8 million from $78.2 million. Transactions that will result in the purchaser holding voting securities, assets or noncorporate interests valued above that threshold will be reportable if the size-of-parties test is also satisfied and no exemptions are available. A series of complex exemptions and rules carefully interpreted by the FTC’s Premerger Notification Office govern issues such as how to calculate value, which assets and securities are covered, and much more.
The size-of-parties threshold will also increase. Generally, one party must have sales or assets of at least $161.5 million, and the other party must have sales or assets of at least $16.2 million. Unless an exemption applies, transactions valued in excess of $323 million will require premerger notification regardless of the annual sales or assets of the parties.
The below chart shows the changes to key notification thresholds.
|
Original Threshold
|
Current Threshold
|
Revised Threshold
|
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$10 million
|
$15.6 million
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$16.2 million
|
|
$50 million
|
$78.2 million
|
$80.8 million
|
|
$100 million
|
$156.3 million
|
$161.5 million
|
|
$200 million
|
$312.6 million
|
$323 million
|
The HSR filing fees will remain the same, but the thresholds for those fees will be adjusted similarly. The filing fees for reportable transactions will be as follows:
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$45,000 for transactions valued in excess of $80.8 million but less than $161.5 million
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$125,000 for transactions valued at $161.5 million or greater but less than $807.5 million
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$280,000 for transactions valued at $807.5 million or more.
A complete listing of the adjusted thresholds can be found at https://www.ftc.gov/system/files/documents/federal_register_notices/
2017/01/clayton_act_section_7a_jan2017.pdf.
