What you need to know

HSR filing thresholds will be adjusted upward effective February 24, 2011.

What you need to do

Parties involved in a large merger or acquisition should verify whether it will exceed the new thresholds.

The Hart-Scott-Rodino Act dollar thresholds are adjusted each year. The next set of adjustments will take effect on February 24, 2011. These adjustments may affect whether a company is required to make a premerger notification filing in any given transaction.

By way of background, the HSR Act is designed to provide notice to the federal antitrust enforcement agencies (the Federal Trade Commission and the US Department of Justice Antitrust Division) in advance of large mergers and acquisitions. Where the HSR Act applies, the parties to such a transaction must submit an elaborate form, along with copies of certain internal documents, and they must pay a large filing fee ($45,000, $125,000 or $280,000, depending on the size of the transaction). When Congress passed the HSR Act in 1976, Congress set dollar thresholds for its application, and those dollar amounts stayed frozen for 24 years. Congress then reformed the HSR law in 2000 by increasing the thresholds and by providing that they will be adjusted for changes in the US gross national product.

Adjusted Filing Thresholds as of 2011

HSR filing thresholds will be higher in 2011 than in 2010. Some transactions that would have required an HSR filing last year will not require a filing if they close on or after February 24, 2011. Below is a short reference:

Click here for table

By way of brief review, and after giving effect to the 2011 adjustments to the thresholds, in most instances the parties to a transaction must make an HSR filing if:

  • One party has a size (sales or assets) of at least $13.2 million;
  • The other party has a size (sales or assets) of at least $131.9 million; and
  • The size of the transaction is at least $66.0 million.

In addition, regardless of the size of the parties, an HSR filing will be required if the size of the transaction is at least $263.8 million. These figures will be adjusted for changes to the US gross national product again next year.

New Form to be Issued

The Federal Trade Commission has proposed to implement a new HSR Form, which will make some important changes in the data and documents required. The new Form has not yet been finalized, however. Until the new HSR Form comes into effect, parties are required to make HSR filings using the current Form.