- This year's revised Federal Trade Commission thresholds under Hart-Scott-Rodino (HSR) represent an approximately 7 percent increase from the existing amounts. They will apply to all applicable transactions on or after February 24, 2014.
- The penalties for noncompliance with HSR requirements include, but are not limited to, civil penalties of up to $16,000 per day for each day of violation.
The Federal Trade Commission (FTC) has announced this year's revision to the thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR), representing an approximately 7 percent increase from the existing amounts. The revised amounts will apply to all transactions closing on or after February 24, 2014. Section 7A of the Clayton Act requires revisions to the HSR thresholds annually based on changes in the gross national product.
HSR requires parties intending to merge, purchase or sell voting securities, non-corporate interests or assets, or engage in certain other acquisition transactions to provide both the FTC and the Antitrust Division of the Department of Justice (DOJ) with information regarding their operations and the proposed transaction if certain minimum jurisdictional thresholds are met. HSR stays the consummation of a covered transaction for the waiting period specified by law based on HSR's purpose to allow the FTC and DOJ time to detect and potentially address any perceived anti-competitive effects of a transaction.
HSR filing requirements apply if both the size-of-transaction and size-of-person jurisdictional thresholds are met and no exemption is available under the HSR regulations. Based on the new thresholds that take effect on February 24, 2014, the size-of-transaction threshold will be met if, as a result of the transaction, the buyer will hold voting securities, assets and/or non-corporate interests of the seller valued in excess of $75.9 million, an increase from the current $70.9 million threshold.
Also as of February 24, 2014, the size-of-person threshold will generally be met if one party to the transaction has total assets or net sales of $151.7 million or more and the other party to the transaction has total assets or net sales of $15.2 million or more — provided that this threshold will not apply to transactions valued at $303.4 million or more. The size-of-person threshold is measured at the ultimate parent entity level of each party and includes all entities controlled by each such ultimate parent entity.
Applicable Filing Fee
HSR requires that each buyer pay a filing fee in connection with any required filing. Although the filing fee thresholds are revised annually, the filing fee amounts are not indexed and have not been adjusted in more than a decade. The filing fee varies based on the value of the voting securities, assets and/or non-corporate interests to be held as a result of the transaction. As of February 24, 2014, filing fees will be as follows:
Click here to view table.
Penalties for Noncompliance
Noncompliance with any requirements under HSR may subject a person, or any officer, director or partner of such person, to civil penalties of up to $16,000 per day for each day of violation. In addition to any monetary penalties, courts may also order compliance with HSR requirements and an extension of the HSR waiting period until substantial compliance has occurred. Courts may also grant certain other equitable relief for any failure by a person to substantially comply with either the HSR premerger notification requirements or with a request by the regulators for additional information once an HSR filing has been made.