Effective February 28, 2008, the reporting notification thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act” or the “Act”) will be increased. In particular, the size-of-transaction threshold will be increased from US$59.8m to US$63.1m. Pursuant to the 2000 Amendments to the HSR Act, annual adjustments to the notifications are made based on an index that is tied to changes in the US gross national product for each fiscal year

The principal changes to the notification thresholds, which will apply to all transacions that are consummated on or after February 28, 2008, are as follows:

  • The initial size-of-transaction threshold will increase from US$59.8m to US$63.1m.
  • The size-of-person thresholds, currently US$119.6m and US$12.0m, will increase to US$126.2m and US$12.6m, respectively.
    • The size-of-person test is only applicable to transactions now valued at US$252.3m or less. (This threshold has been increased from US$239.2m.)
  • The notification thresholds – for stock transactions, the highest threshold that will be crossed as a result of the transaction – will also be increased as follows:
    • The US$59.8m notification threshold will increase to US$63.1m.
    • The US$119.6m notification threshold will increase to US$126.2m.
    • The US$597.9m notification threshold will increase to US$630.8m.
    • The 25 percent notification threshold, currently applicable to acquisitions of stock valued in excess of US$1,195.8m, will now apply to acquisitions of stock valued in excess of US$1,261.5m.
    • The 50 percent notification threshold remains unchanged.
  • The foreign commerce exemptions, currently US$59.8m and US$131.5m, will increase to US$63.1m and US$138.8m, respectively. Under the revised thresholds:
    • Acquisitions of voting securities of a foreign issuer by a US person are exempt unless the foreign issuer either: (i) holds assets in the United States valued in excess of US$63.1m (currently US$59.8m); or (ii) made sales in or into the United States in excess of US$63.1m (currently US$59.8m) in the last fiscal year.
    • Acquisitions of voting securities of a foreign issuer by a foreign person are exempt unless the transaction confers control over the issuer and the foregoing thresholds are met.
    • Acquisitions of foreign assets are exempt if the assets did not generate sales in or into the United States in excess of US$63.1m (currently US$59.8m) in the last fiscal year.
    • Acquisitions by a foreign person of either (a) voting securities of a foreign issuer where control is conferred or (b) foreign assets are also exempt if: (i) the aggregate total sales of both the acquiring person and acquired person in or into the United States is less than US$138.8m (currently US$131.5m) in the last fiscal year; (ii) the aggregate total assets of the acquiring person and acquired person in the United States is less than US$138.8m (currently US$131.5m); and (iii) the value of the transaction does not exceed US$252.3m (currently US$239.2m).
  • The filing fee thresholds, currently US$59.8m, US$119.6m and US$597.9m, will increase to US$63.1m, US$126.2m and US$630.8m, respectively. The filing fees themselves – of US$45,000, US$125,000 and US$280,000 – will not increase.