Federal Trade Commission Announces New Hart-Scott-Rodino Thresholds

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The Federal Trade Commission has announced the following new Hart-Scott-Rodino (HSR) filing thresholds, which will be effective for transactions closing on or after Feb. 11, 2013.

Any acquisition of voting securities and/or assets requires premerger notification to the FTC and the Department of Justice under the HSR Act and the regulations promulgated thereunder (16 C.F.R. Sections 801 – 803) if the following tests are satisfied and if no exemption applies (15 U.S.C. Section 18a(a)(2)).

Where a premerger notification is required, both parties must file, the acquiring person must pay a filing fee ($45,000 for transactions valued in excess of $70.9 million but less than $141.8 million, $125,000 for transactions valued at $141.8 million but less than $709.1 million or $280,000 for transactions valued at $709.1 million or more) and the parties must observe a 30-day waiting period prior to closing.

  • Transactions valued at $70.9 million or less are not reportable: If, as a result of the acquisition, the acquiring person will hold an aggregate total amount of voting securities and assets of the acquired person valued at $70.9 million or less, then the HSR Act does not apply regardless of the size of the parties involved;
  • Transactions valued in excess of $283.6 million are reportable unless exempt under the Act: If, as a result of the acquisition, the acquiring person will hold an aggregate total amount of voting securities and assets of the acquired person valued in excess of $283.6 million, then the HSR Act applies and a filing must be made prior to the acquisition, regardless of the size of the parties involved;
  • Transactions valued in excess of $70.9 million but less than $283.6 million are reportable if the Size of the Parties Test is also met: If, as a result of the acquisition, the acquiring person will hold an aggregate total amount of voting securities and assets of the acquired person valued in excess of $70.9 million but less than $283.6 million, then the HSR Act applies only if the following size-of-parties tests are also met:
    • One party to the transaction, or its Ultimate Parent Entity, must have $141.8 million or more in total assets or annual net sales; and
    • The other party to the transaction, or its Ultimate Parent Entity, must have $14.2 million or more in total assets or annual net sales.

Assuming that a transaction is reportable, the parties should consider the exemptions found at 16 CFR Sections 802 et seq.