The FTC has announced that the reporting notification thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act” or the “Act”) will be increased, effective 30 days after the revised thresholds have been published in the Federal Register. The FTC has yet to publish the Federal Register notice, but based on prior practice, the new thresholds will likely become effective by late February 2009. Until the effective date, the current thresholds will apply. In particular, the size-of-transaction threshold will be increased from $63.1 million to $65.2 million. Pursuant to the 2000 Amendments to the HSR Act, annual adjustments to the notification thresholds are made based on an index that is tied to changes in the U.S. gross national product for each fiscal year.  

The principal changes to the notification thresholds, which will apply to all transactions that are consummated on or after the effective date, are as follows:  

  • The initial size-of-transaction threshold will increase from $63.1 million to $65.2 million.  
  • The size-of-person thresholds, currently $126.2 million and $12.6 million, will increase to $130.3 million and $13.0 million, respectively.
    • The size-of-person test is only applicable to transactions now valued at $260.7 million or less (currently $252.3 million).  
  • 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 $63.1 million notification threshold will increase to $65.2 million.
    • The $126.2 million notification threshold will increase to $130.3 million.
    • The $630.8 million notification threshold will increase to $651.7 million.
    • The 25 percent notification threshold, currently applicable to acquisitions of stock valued in excess of $1.2615 billion, will now apply to acquisitions of stock valued in excess of $1.3034 billion.
    • The 50 percent notification threshold remains unchanged.
  • The foreign commerce exemptions, currently $63.1 million and $138.8 million, will increase to $65.2 million and $143.4 million, respectively. Under the revised thresholds
    • Acquisitions of voting securities of a foreign issuer by a U.S. person are exempt unless the foreign issuer either: (i) holds assets in the United States valued in excess of $65.2 million (currently $63.1 million), or (ii) made sales in or into the United States in excess of $65.2 million (currently $63.1 million) in the last fiscal year.

    • Acquisitions of voting securities 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 $65.2 million (currently $63.1 million) 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 the acquired person in or into the United States are less than $143.4 million (currently $138.8 million) in the last fiscal year; (ii) the aggregate total assets of the acquiring person and acquired person in the United States are less than $143.4 million (currently $138.8 million); and (iii) the value of the transaction does not exceed $260.7 million (currently $252.3 million).

  • The filing fee thresholds, currently $63.1 million, $126.2 million and $630.8 million, will increase to $65.2 million, $130.3 million and $651.7 million, respectively. The filing fees themselves – of $45,000, $125,000 and $280,000 – will not increase.