The Federal Trade Commission (FTC) has announced revised thresholds for the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976. The revisions increase the lowest "size-of-transaction" threshold at which HSR filings may be required from the current $59.8 million to $63.1 million.
Under the HSR Act, the FTC and Department of Justice (DOJ) must be notified before mergers, acquisitions and other transactions that meet certain monetary thresholds are consummated. Once notification is filed, the parties must observe a 30-day waiting period (unless granted early termination) to allow the agencies to review the transaction for possible violation of antitrust laws.
Section 7A(a)(2) of the Clayton Act requires the FTC to annually revise the jurisdictional thresholds and other thresholds and limitations in the HSR rules according to changes in gross national product. Accordingly, each of the affected thresholds will increase approximately 5.5 percent over current amounts.
- The new thresholds will be published in the Federal Register within the next few days, and will take effect 30 days after the date of publication. The thresholds will apply to transactions that will close on or after that date. Significant thresholds to be changed are as follows:
- The current threshold of $59.8 million rises to $63.1 million.
- The current threshold of $119.6 million rises to $126.2 million.
- The current threshold of $239.2 million rises to $252.3 million.
- The current threshold of $597.9 million rises to $630.8 million.
- The current $1.196 billion threshold rises to $1.262 billion.
- The size-of-person thresholds that apply to transactions valued at less than $252.3 million will increase to $126.2 million (from $119.6 million) for one party and $12.6 million (from $12 million) for the other party to a transaction.
- Filing fee amounts will remain the same; however, filing fee thresholds will increase as follows: a fee of $45,000 will be required for transaction valued at more than $63.1 million, but less than $126.2 million; a fee of $125,000 will be required for transactions valued at or in excess of $126.2 million, but less than $630.8 million; and a fee of $280,000 will be required for transactions valued at or more than US$630.8 million.
Section 8 of the Clayton Act generally prohibits persons from serving as a director or officer of two competing corporations (so called "interlocking directorates") if each corporation is of a certain minimum size. Under the increased thresholds required by a 1990 amendment to the Act, interlocking directorates will be prohibited where (i) each competing corporation has capital, surplus and undivided profits of more than $25.319 million (increased from $24.001 million), and (ii) neither corporation has competitive sales less than $2.532 million (increased from $2.4 million). These new monetary thresholds will be published in the Federal Register within the next few days and will take effect immediately upon publication