On January 19, the Federal Trade Commission announced revised thresholds for premerger filings under the Hart-Scott-Rodino Antitrust Improvements Act (“HSR Act”). Acquisitions that do not close by the February 22 effective date will be subject to the new $63.4 million transaction size threshold for reporting. (The current 2009 threshold is $65.2 million.)
This is the first time that the HSR thresholds have been lowered. The thresholds are adjusted annually based on the gross national product, and because the economy contracted last year, the reporting thresholds decreased for 2010.
The HSR “size of transaction” includes the value of the assets, stock or noncorporate interests (such as partnership or LLC membership interests) being acquired in addition to the value of the acquiring person’s prior holdings. In asset deals, the value of the assets is either the acquisition price or the fair market value, whichever is higher, and may include assumed liabilities.
If you are working on a merger or acquisition, we recommend that you consult with HSR counsel to determine whether the transaction will require a HSR filing (or possibly a similar competition filing in another country if either of the parties has foreign assets or sales). There is a maximum $16,000 per day civil penalty for failure to file a HSR notice when required.
The new 2010 HSR filing thresholds are set out in this table.
While the filing thresholds have changed, the filing fees remain the same. If the value of the transaction is more than $63.4 million but less than $126.9 million, the filing fee is $45,000. The filing fee is $125,000 if the value of the transaction is $126.9 million or more but less than $634.4 million. If the value of the transaction is $634.4 million or more, the filing fee is $280,000.