On January 28, 2020, the Federal Trade Commission (FTC) announced revised jurisdictional thresholds for reporting transactions pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). Dentons reviews the new thresholds which take effect on February 28, 2020.
Changes to the HSR reporting thresholds
Section 7A of the Clayton Act, commonly known as the HSR Act, requires all persons contemplating certain mergers, acquisitions, joint ventures and corporate and non-corporate formations (e.g., LLCs and LPs) that meet or exceed the HSR Act's jurisdictional thresholds (1) to notify the FTC Bureau of Competition and the US Department of Justice (DOJ) Antitrust Division and (2) to wait the statutory 30-day period before consummating the transaction (unless early termination of the waiting period is granted). Pursuant to the 2000 Amendments, the FTC is required to revise the jurisdictional thresholds annually based on the change in gross national product.
No transaction resulting in an acquiring person holding an aggregate total amount of voting securities or assets in the acquired party of less than US$94 million (up from the prior level of US$90 million) will need to be reported under the rules. (Please note, however, that transactions with values below this threshold are still subject to antitrust review by the FTC or the DOJ's Antitrust Division).
All acquisitions that result in an acquirer holding an aggregate total amount of the voting securities or assets of the acquired party in excess of US$376 million (formerly US$359.9 million) will be reportable, unless otherwise exempted.
'Size of the person' test
Acquisitions valued between US$94 million and US$376 million are reportable based on the size of the acquiring person and the size of the acquired person (i.e., the size of the person" test). Generally, this test requires that one side of the transaction have sales or assets of at least US$18.8 million (up from US$18 million) and the other side have sales or assets of at least US$188 million (up from US$180 million). The filing fees remain the same and apply to the revised thresholds as follows:
|Value of assets or voting securities to be held||Fee amount|
|Greater than US$94 million but less than US$188 million||US$45,000|
|US$188 million or greater but less than US$940.1 million||US$125,000|
|US$940.1 million or greater||US$280,000|
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