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On January 24, 2012, the Federal Trade Commission announced
revised thresholds for Hart-Scott-Rodino ("HSR")
Premerger Notification filings and for the jurisdictional
thresholds that trigger the prohibition on interlocking
directorates under Section 8 of the Clayton Act. These thresholds
are revised annually to reflect changes in the gross national
product.
The revised HSR thresholds will apply to all transactions that
close on or after the effective date, which is 30 calendar days
following publication of the changes in the Federal Register. This
effective date is expected to be in late February. The Interlocking
Directorates threshold revisions will be published in the Federal
Register shortly and will be effective upon publication.
New HSR Thresholds
Size-of-Transaction Test. An HSR filing may be
required if the acquiror will hold, as a result of the transaction,
voting securities or assets of the acquired person in excess of
$68.2 million, and the Size-of-Person test must be met, unless the
value of the securities or assets exceeds $272.8 million, in which
case the parties must report the transaction notwithstanding the
size of the parties.
Size-of-Person Test. If the value of the
securities and assets held as a result of the transaction is
between $68.2 million and $272.8 million, the transaction must be
reported in most cases if either the acquired or acquiring person
has annual net sales or total assets of at least $136.4 million and
the other party to the transaction has at least $13.6 million in
annual net sales or total assets.
HSR Filing Fee
There is no change in the HSR filing which remains:
Fee
Size-of-Transaction
$45,000
valued in excess of $68.2 million but less than $136.4
million
$125,000
valued at $136.4 million or greater but less than $682.1
million; or
$280,000
valued at $682.1 million or greater
Both the Federal Register notice and the FTC press release make a
point of noting that, unlike the thresholds, the HSR filing fee is
not indexed and has not been increased in more than ten years.
New Interlocking Directorates Thresholds
Section 8 of the Clayton Act prohibits the same person from
serving as an officer or director of competing corporations if
certain thresholds are met. Based on the revised thresholds,
competitor corporations are covered by Section 8 if each one has
capital, surplus, and undivided profits aggregating more than
$27,784,000 (Section 8(a)(1)), except that no corporation is
covered if the competitive sales of either are less than $2,778,400
(Section 8(a)(2)(A)).
The Federal Register Notices are available on the FTC's
website here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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