The 2016 adjustments to the Hart-Scott-Rodino ("HSR") Act thresholds take effect today, February 25, and will remain in effect through January 2017. The thresholds, used to determine when a transaction triggers premerger reporting requirements and to assess the application of certain exemptions, are adjusted each year by the Federal Trade Commission. The Commission also revises annually the jurisdictional thresholds that trigger the prohibition on interlocking directorates, which took effect on January 26. The FTC adjusts all such thresholds based on the change in the gross national product from year to year.
Adjusted HSR Jurisdictional Thresholds
Size-of-Transaction threshold. An HSR Act filing may be required if the acquirer will hold, as a result of the transaction, voting securities, non-corporate interests and assets of the acquired person valued in excess of $78.2 million (the 2015 threshold was $76.3 million). If the Size-of-Transaction is between $78.2 million and $312.6 million, the transaction also must satisfy the Size-of-Person threshold. Transactions valued in excess of $312.6 million may require a filing without regard to the Size-of-Person threshold.
Size-of-Person threshold. A transaction meets the Size-of-Person threshold if either the acquired or acquiring person has annual net sales or total assets of at least $156.3 million and the other party to the transaction has at least $15.6 million in annual net sales or total assets.
New Interlocking Directorates Thresholds
Section 8 of the Clayton Act prohibits a single person from serving as an officer or director of competing corporations if certain thresholds are met. Based on the revised thresholds, competitor corporations are covered by the Section 8 prohibition if each one has capital, surplus, and undivided profits aggregating to more than $31.841 million (Section 8(a)(1)). However, no corporation is covered if the competitive sales of either are less than $3.184 million (Section 8(a)(2)(A)).
The Federal Register notice containing a complete list of these and additional related thresholds contained in the HSR rules (16 C.F.R. Parts 801-803) can be found on the Federal Trade Commission's website.