FTC Announces Increased Thresholds for HSR Premerger Notifications and Interlocking Directorates

Snell & Wilmer

Snell & Wilmer

The Federal Trade Commission (FTC) announced on January 19, 2017 the revised transaction thresholds that trigger the requirement to file a premerger notification and report form under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act).  The FTC revises the thresholds annually based on changes in the gross national product.  The new thresholds will likely be published within a few days and will become effective 30 days thereafter.

With these recent adjustments to the HSR thresholds, the parties to a transaction must file an HSR notification if a deal meets one of two tests:

1. The total value of a proposed transaction exceeds $323 million; or

2. The total value of a proposed transaction exceeds $80.8 million, and one party has at least $16.2 million in total assets or sales, and the other party has at least $161.5 million in total assets or sales.

The HSR Act requires parties engaged in certain transactions (including mergers, acquisitions, joint ventures and exclusive license deals) to file a notification and report form to both the FTC and the Department of Justice, Antitrust Division prior to closing.  Reportable transactions cannot be consummated until after a designated period of time (usually 30 days).  Although there are certain statutory exemptions to the HSR filing requirement, the $80.8 million threshold is a key threshold to keep in mind.  Any transaction that falls below that threshold is exempt from the filing requirements.

The filing fees under the HSR Act have not been adjusted and remain as follows:

Value of Transaction

Filing Fee

$80.8 million to $161.5 million


$161.5 million to $807.5 million


$807.5 million or more


The FTC also announced revised thresholds above which companies are prohibited from having interlocking memberships on their board of directors under Section 8 of the Clayton Act.  Section 8 prohibits, with certain exceptions, one person from serving as a director or officer of two competing corporations if each corporation has capital, surplus and undivided profits aggregating more than $32,914,000, with the exception that the interlock is not prohibited if the competitive sales of either corporation are less than $3,291,400.  The new Section 8 thresholds become effective immediately upon publication in the Federal Register.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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