On Jan. 6, 2009, the Federal Trade Commission (“FTC”) announced the revised reporting thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). Pursuant to the amendments to Section 7A of the Clayton Act enacted in 2000, the FTC is required to revise the jurisdictional thresholds annually, based on the change in gross national product. The revised thresholds are expected to be published in the Federal Register in the coming days and will become effective 30 days after publication. (Typically, the effective date occurs around mid- to late-February.)
The minimum “size-of-transaction” threshold increased to $65.2 million from $63.1 million. Acquisitions of assets, voting securities or noncorporate interests valued below this threshold will not be reportable.
The revised thresholds, as set forth here, will apply to all transactions that close on or after the effective date.
Corresponding increases will also apply to certain other thresholds and exemptions under the HSR Act. However, the FTC has not announced any increases to the filing fees applicable to reportable transactions. Therefore, under the revised thresholds, the applicable filing fees will be as follows.
For a reportable transaction, the acquiring person’s holdings must cross the threshold with respect to which the HSR notification is made within one year of the expiration or early termination of the HSR waiting period. If the applicable threshold is adjusted upwards during such one-year period, the acquiring person has the benefit of the threshold that was effective as of the date of the notification.
Once the acquiring person has crossed the applicable threshold during the first year, any additional acquisitions by the same acquiring person of same issuer’s voting securities will be exempt from notification during the five years following the expiration or early termination of the HSR waiting period, unless a higher notification threshold is crossed. For purposes of this exemption, the acquiring person has the benefit of the higher adjusted threshold during such five-year period.
There are many complex and technical coverage requirements and exemptions under the HSR Act. Accordingly, the advice of counsel must be sought to determine the applicability of the HSR Act’s filing requirements to particular situations.