The Federal Trade Commission (FTC) announced its annual revision of the filing thresholds under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act), which determine companies' reporting obligations for mergers and acquisitions. The FTC also announced revisions to thresholds relating to prohibitions on interlocking directorates under Section 8 of the Clayton Act. The revised HSR Act thresholds will become effective 30 days after the FTC's publication appears in the Federal Register, and that publication will likely occur during the week of January 25, 2016. The revisions regarding interlocking directorates will become effective immediately.
Under the newly adjusted HSR Act thresholds, a merger or acquisition of stock or assets valued at more than $78.2 million (the 2015 level was $76.3 million) may be subject to premerger notification and waiting period requirements, if the transaction meets certain other criteria. The size of the parties to a transaction affects reporting obligations and these thresholds have been adjusted as well.
| Size of the Transaction | Size of the Parties and Reporting Obligation |
| More than $78.2
million but less than $312.6 million |
Filing may be required if one party's sales or assets exceed $156.3 million and the other party's sales or assets exceed $15.6 million. |
| Over $312.6 million | Filing may be required irrespective of the parties' size. |
Unless a transaction is otherwise exempt, it is reportable under the HSR Act in the circumstances above. The HSR Act requires parties to certain mergers or acquisitions to file premerger notification reports with the FTC and the Antitrust Division of the Department of Justice, and to observe waiting periods that allow the antitrust authorities to review transactions for possible antitrust violations under Section 7 of the Clayton Act before closing occurs on the transactions.
Filing fees for transactions reportable under the HSR Act have also been adjusted. The new fees will be:
| Size of the Transaction | Filing Fee |
| More than $78.2 million but less than $156.3 million | $45,000 |
| Equal to $156.3 million but less than $781.5 million | $125,000 |
| $781.5 million or greater | $280,000 |
New thresholds for the Clayton Act's prohibition on interlocking directorates were also announced. Section 8 of the Clayton Act makes it illegal for a person to serve as a director or officer for two competing companies when the companies' profits or competitive sales exceed threshold limits. Under the new thresholds, it is illegal for an individual to serve in these capacities for competing corporations if each company has capital, surplus and undivided profits aggregating more than $31,841,000 (Clayton Act, Section 8(a)(1)), unless one of the companies' competitive sales against the other are less than $3,184,100 (Clayton Act, Section 8(a)(2)(A)).
The revised HSR Act thresholds will become effective 30 days after the FTC's publication appears in the Federal Register, and that publication will likely occur during the week of January 25, 2016. The revisions regarding interlocking directorates will become effective immediately.
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