The Federal Trade Commission (“FTC”) has announced revised thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), that will go into effect on February 25, 2016. The revised thresholds will apply to transactions that close on or after the effective date. The threshold adjustments are the result of the 2000 Amendments to the HSR Act, which require the FTC to adjust the thresholds annually based on the percentage change in the gross national product from the previous year.
The HSR Act governs the reporting of acquisitions and mergers in the United States. Under the Act, and the statutes and rules implementing it, every nonexempt acquisition of assets or voting securities that exceeds certain thresholds under the Size of Transaction and Size of Parties tests must be reported to the FTC and the Department of Justice (“DOJ”), and cannot be consummated until after the expiration of a defined waiting period during which the FTC or DOJ will examine the competitive merits of the transaction and determine whether or not to challenge the consummation of the transaction.
Size of Transaction Test
Under the current Size of Transaction Test, no HSR filing is required unless the acquisition results in an acquiring person holding an aggregate total amount of voting securities and/or assets of the acquired person in excess of $76.3 million. The new threshold will be $78.2 million.
Size of Parties Test
Under the current thresholds, acquisitions valued above $305.1 million are reportable regardless of the size of the parties. The new threshold will be $312.6 million.
Under the current thresholds, acquisitions valued at greater than $76.3 million (to become $78.2 million) but less than or equal to $305.1 million (to become $312.6 million) are reportable only if the Size of Parties Test is met. The current Size of Parties Test is met if the acquiring or acquired person has annual net sales or total assets of $152.5 million or more and another party to the transaction has annual net sales or total assets of $15.3 million or more. The new thresholds will be $156.3 million and $15.6 million respectively.
Filing Fee Thresholds
The thresholds at which the three levels of filing fees attach will be similarly increased, although the filing fees themselves will remain the same. The new thresholds for determining the applicable filing fee will be as follows:
|Fee||Size of Transaction|
|$45,000|| If the size of transaction is valued |
at more than $78.2 million, but less
than $156.3 million.
|$125,000||If the size of transaction is valued |
at $156.3 million or more, but less
than $781.5 million.
|$280,000|| If the size of transaction is valued |
at $781.5 million or more.
The revised thresholds will also result in corresponding adjustments to the thresholds used for determining the applicability of certain exemptions under the HSR Act. For example, the current $76.3 million threshold applicable to foreign assets and foreign voting securities will be raised to $78.2 million.