The Federal Trade Commission (the “FTC”) has revised the jurisdictional and filing fee thresholds of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) and the Premerger Notification Rules (the “Rules”). The adjustments to the dollar thresholds of the HSR Act and Rules (based on changes in the gross national product) are required by the 2000 amendments to the HSR Act. For 2015, the thresholds will increase as a result of the increase in the GNP. The new thresholds take effect on February 20, 2015 and will apply to transactions that close on or after that date.
The HSR Act requires parties intending to merge or to acquire assets, voting securities or certain non-corporate interests to notify the FTC and the Department of Justice, Antitrust Division, and to observe certain waiting periods before consummating the acquisition if certain filing thresholds are met. Notification and Report Forms must be submitted by the parties to a transaction if both the (1) size of transaction and (2) size of parties thresholds are met, unless an exemption from filing applies.
1. Size of Transaction
The minimum size of transaction threshold is $76.3 million, increased from the 2014 threshold of $75.9 million.
2. Size of Parties
The size of parties threshold is inapplicable if the value of the transaction exceeds $305.1 million ($303.4 million in 2014). For transactions with a value between $76.3 million and $305.1 million, the size of parties threshold must be met and will be satisfied in one of the following three ways:
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The various jurisdictional thresholds, notification thresholds, filing fee thresholds and thresholds applicable to certain exemptions will also increase as summarized in Appendix A to this memorandum.
The FTC has also increased, effective immediately, the thresholds that prohibit, with certain exceptions, competitor companies from having interlocking relationships among their directors or officers under Section 8 of the Clayton Act. Section 8 provides that no person shall, at the same time, serve as a director or officer in any two corporations that are competitors, such that elimination of competition by agreement between them would constitute a violation of the antitrust laws. There are several “safe harbors” which render the prohibition inapplicable under certain circumstances, such as when the size of the corporations, or the size and degree of competitive sales between them, are below certain dollar thresholds. Competitor corporations are now subject to Section 8 if each one has capital, surplus, and undivided profits aggregating more than $31,084,000, although no corporation is covered if the competitive sales of either corporation are less than $3,108,400. Even when the dollar thresholds are exceeded, other exceptions preventing the applicability of Section 8 may be available (e.g., the percentage of competitive sales relative to total sales).
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