On January 21, 2011, the Federal Trade Commission (FTC) announced revised notification thresholds pursuant to the Hart Scott Rodino Act (HSR). Section 7A of the Clayton Act, 15 U.S.C. 18a, requires parties to the file premerger notification with the FTC and the U.S. Department of Justice, Antitrust Division (DOJ) prior to closing amerger or acquisition thatmeets the HSR's size of transaction and size of person thresholds.

The FTC is required to revise the HSR thresholds annually based on changes in the gross national product. The following adjusted thresholds for 2011 will go into effect 30 days after their date of publication in the Federal Register:

Click here to see table.

Size of Transaction

Transactions now valued greater than $66million will trigger the HSR reporting requirements. The adjusted threshold establishes an absolute floor of $66million,meaning that there is no HSR reporting requirement for any transaction valued at $66million or less, regardless of the percentage of assets or voting securities to be acquired.

Size of Person

Under the size-of-person test, when the value of a proposed transaction exceeds $66million, but is less than $263.8million, the transactionmust be reported if (1) one person to the transaction has total assets or net sales of $131.9million ormore and (2) the other has total assets or net sales of $13.2million ormore.

All transactions valued in excess of $263.8million will be reportable without regard to the size-ofperson test.

Conclusion

Parties contemplatingmerger or acquisition activity are strongly encouraged to consult antitrust counsel prior to closing to determine whether premerger notification is required. The rules governing the calculation of the relevant thresholds and the applicability of particular exemptions to all or part of the transaction are complex.More importantly, under certain circumstances, parties can face penalties of up to $16,000 per day for failure to comply with these filing obligations.

Note that, even if an acquisition ormerger does notmeet the dollar threshold, and thus is not reportable under HSR, theremay be competitive issues that should be addressed before consummation of the transaction. The FTC and the Department of Justice have the authority under Section 7 of the Clayton Act and Section 5 of the FTC Act to challenge transactions likely to substantially lessen competition.