Hart-Scott-Rodino Jurisdictional Thresholds Adjusted Upward
Federal law requires that mergers, acquisitions, and other transactions of a certain size be notified to the Federal Trade Commission and Department of Justice prior to consummation, pursuant to the Hart-Scott-Rodino Antitrust Improvements Act, 15 USC §18a (2001). The purpose of the HSR filing is to enable antitrust regulators to review the transaction and investigate and address potential antitrust violations prior to its consummation.
Each year, the FTC adjusts the dollar thresholds that trigger the obligation to make HSR filings based on changes in the gross national product. Last week, the FTC announced the new thresholds for this year. Effective February 24, 2011, the basic notification threshold will be adjusted upward from $63.4 million to $66.0 million.
Unless otherwise exempt, an entity that directly or indirectly acquires assets or voting securities (or similar interests in an unincorporated entity) in excess of $66 million may be required to file notification under the Act and to observe the applicable waiting period before consummating the transaction. In each instance where an acquiring person files under the Act, the acquired person is also required to submit a filing. Transactions involving the acquisition of subsequent interests are typically exempt from further notification under the Act unless a subsequent notification threshold is exceeded.
Transactions valued at $263.8 million or less ($253.7 million prior to February 24, 2011), however, are not subject to the HSR Act unless the parties also meet the size-of-person thresholds. Under the revised thresholds, the size-of-person threshold is met where a person with annual net sales or total assets of $131.9 million acquires a person with annual net sales or total assets of $13.2 million, or vice-versa.
The following charts provide a summary of the HSR Act's threshold adjustments:
SIZE-OF-TRANSACTION
Old Threshold
New Threshold (Effective February 24, 2011)
Jurisdictional Threshold
Basic Notification Threshold
$63.4 Million
$66.0 Million
$126.9 Million
$131.9 Million
Subsequent Notification Thresholds
$634.4 Million
$659.5 Million
25% (if value exceeds $1.2687 billion)
25% (if value exceeds $1.319 billion)
50% (where value exceeds $63.4 million)
50% (where value exceeds $66.0 million)
SIZE-OF-PERSON
Old Threshold
New Threshold (Effective February 24, 2011)
Jurisdictional Threshold
Size-of-Person Thresholds
$12.7 Million
$13.2 Million
$126.9 Million
$131.9 Million
...
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