On January 6, 2009, the Federal Trade Commission (FTC) released the text of its upcoming Federal Register notices regarding the annual jurisdictional adjustments for premerger notification filings made pursuant to Section 7A of the Clayton Act, known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), as well as for Section 8 of the Clayton Act. The new thresholds for HSR notification will be published in the Federal Register shortly and will become effective 30 days after publication. We anticipate that the new HSR jurisdictional threshold tests will likely be effective in mid- to late-February 2009. The notice announcing the revisions to Section 8 also will be published in the Federal Register shortly and such revisions will be effective upon publication.
HSR Notification Thresholds
Under the HSR Act, certain acquisitions of assets, voting securities, and/or interests in non-corporate entities are subject to premerger notification filing and waiting period requirements if the applicable jurisdictional thresholds are satisfied and no exemption applies.
Each year the FTC adjusts the HSR jurisdictional threshold tests based on changes to the U.S. gross national product for each fiscal year compared to the gross national product for the fiscal year ending September 30, 2003. The threshold changes do not affect the amount of the applicable HSR filing fees to be paid, but do affect the threshold levels applicable to each of the filing fees.
The principal changes to the HSR jurisdictional thresholds will be as follows: see table
Interlocking Directorates Threshold
Section 8 of the Clayton Act prohibits a person from serving as a director or officer of two competing corporations if certain thresholds are satisfied and no exemption applies. The FTC’s recent announcement was prompted by a 1990 amendment to Section 8 of the Clayton Act, which requires the FTC to adjust on an annual basis the thresholds that trigger the prohibition based on changes to the U.S. gross national product for each fiscal year compared to the gross national product for the fiscal year ending September 30, 1989.
Under the new thresholds that will be effective upon publication in the Federal Register, a person may not serve as a director or officer of competing corporations if each corporation has capital, surplus, and undivided profits aggregating more than $26,161,000 unless one of the corporations has competitive sales of less than $2,616,100. Previously, a person was prohibited from serving as a director or officer of competitive corporations if each corporation had capital, surplus, and undivided profits aggregating more than $25,319,000 unless one of the corporations had competitive sales of less than $2,531,900.