On January 10, 2013, the Federal Trade Commission (FTC)
announced its updated dollar thresholds to merger filings required
by the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act).
These thresholds will become effective 30 days after publication in
the FederalRegister.
The HSR Act established various criteria for determining whether
asset acquisitions and merger transactions must be reported to the
FTC and the Department of Justice prior to consummation. Generally,
whether a transaction is subject to HSR reporting requirements
depends on three tests: (1) the in commerce test; (2) the
size-of-transaction test; and (3) the size-of-persons test. Parties
to a transaction that meet the threshold criteria under these tests
must report the transaction to the federal antitrust enforcement
agencies and then observe a waiting period to enable the government
to analyze the deal's competitive effects. The FTC is required
to revise the filing thresholds annually, based on the change in
the Gross National Product (GNP).
Reporting Thresholds
Size-of-Transaction Test. A transaction satisfies the
reporting threshold under the size-of-transaction test if, through
the transaction, the acquiring party would obtain voting securities
or assets of another party having a value that exceeds the
threshold amount. The recent adjustment to the reporting threshold
increases the minimum amount of the deal value from $68.2 million
to $70.9 million.
Size-of-Persons Test. The new adjustments have also
increased the thresholds under this test. A transaction will
satisfy the size-of-persons test if one party to the transaction
has annual net sales or total assets equal to or exceeding $14.2
million (up from $13.6 million), and the other party to the
transaction has annual net sales or total assets equal to or
exceeding $141.8 million (up from $136.4 million). In calculating
whether a transaction must be reported under this test, the annual
net sales and total sales will be based on a party's most
recent regularly prepared balance sheet. A transaction exceeding
$283.6 million (up from $272.8 million) is reportable regardless of
the size of the parties.
HSR Filing Fees
The filing fees remain unchanged from 2012. Unlike the filing
fee thresholds, which are revised annually, the actual filing fees
have not been adjusted in over a decade.
Revised Interlocking Directorates Thresholds
The FTC also announced revised dollar thresholds for evaluating interlocking directorates under Section 8 of the Clayton Act. Section 8 generally prohibits a person from serving as an officer or director for competing corporations other than banks, banking associations and trust companies. Under Section 8, these thresholds will generally apply if both corporations have capital, surplus, and undivided profits aggregating more than $28,883,000 (up from $27,784,000), and competitive sales of at least $2,888,300 (up from $2,778,400) with certain exceptions. These new thresholds will take effect on the date of publication in the Federal Register.
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