FTC Announces Increases to Hart-Scott-Rodino Thresholds
The Federal Trade Commission (FTC) has announced increases in the thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) which will apply to all transactions closing on or after February 28, 2008. Beginning in 2005, Congress required that the FTC increase the HSR thresholds annually based on changes in the gross national product.
HSR requires that parties intending to merge, purchase or sell voting securities, non-corporate interests or assets, or engage in certain other acquisition transactions provide both the FTC and the Antitrust Division of the Department of Justice (DOJ) with information regarding their operations and the proposed transaction if certain minimum jurisdictional thresholds are met. Based on HSR’s purpose to allow the FTC and DOJ time to detect and potentially address any perceived anti-competitive effects of a transaction, the parties involved may not close a covered transaction until the applicable waiting period designated in HSR has passed.
HSR filings are required if both the size of person and size of transaction jurisdictional thresholds are met and no exemption is available under the HSR regulations. As of February 28, 2008, the new thresholds are as follows:
- The size of person threshold will generally be met if one party to the transaction has total assets or net sales of $126.2 million or more and the other party to the transaction has total assets or net sales of $12.6 million or more – provided that this threshold does not apply to transactions valued at $252.3 million or more. The size of person threshold is measured at the ultimate parent entity level of each party and includes all entities controlled by each such ultimate parent entity.
- The size of transaction threshold will be met if, as a result of the transaction, the buyer will hold voting securities, assets and/or non-corporate interests of the seller valued in excess of $63.1 million.
Under HSR, each buyer is required to pay a filing fee in connection with any required filing. The applicable filing fee varies based on the value of the voting securities, assets and/or non-corporate interests to be held as a result of the transaction. As of February 28, 2008, the filing fee schedule will be as follows:
|Value of Transaction||Filing Fee|
|> $63.1 million but < $126.2 million||$45,000|
|126.2 million or more but < $603.8 million||$125,000|
|$630.8 million or more||$280,000|
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