On January 21, 2016, the Federal Trade Commission announced new jurisdictional thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) and Section 8 of the Clayton Act (“Corporate Interlock Statute”). The FTC is required to adjust the thresholds annually, based on changes in the gross national product. The new HSR thresholds will become effective 30 days after publication in the Federal Register. The revisions to the corporate interlock thresholds will become effective immediately upon publication in the Federal Register. Both changes are expected to be effective prior to the end of February 2016.
REVISED HSR THRESHOLDS
Under the revised thresholds, unless covered by an exemption, HSR filings and waiting periods are required for transactions valued in excess of the $78.2 million size of transaction threshold involving parties with annual net sales or total assets meeting the size of persons threshold of $15.6 million or more and $156.3 million or more, respectively. In addition, if the size of transaction will exceed $312.6 million, HSR filings are required regardless of the size of persons.
A complete list of the revised thresholds is set out below.
|ORIGINAL THRESHOLDS||ADJUSTED THRESHOLDS|
|Size of Transaction1||
|Size of Persons2||
25% of stock valued at $1 billion
50% of stock valued over $50 million
50% over $78.2 million
The HSR filing fees remain unchanged and apply to the revised thresholds as follows.
|TRANSACTION VALUES||FILING FEE|
|In excess of $78.2 million but less than $156.3 million||$45,000|
|$156.3 million or greater but less than $781.5 million||$125,000|
|$781.5 million or more||$280,000|
1 Size-of-Transaction: HSR notifications may be required if an acquiring person, as a result of an acquisition, will hold assets, voting securities, and/or non-corporate interests valued at more than $50 million, as adjusted. 2 Size-of-Persons: Generally, one “person” to the transaction must have at least $10 million, as adjusted, in annual net sales or total assets, and the other “person” must have at least $100 million, as adjusted, in annual net sales or total assets. Transactions valued in excess of $200 million, as adjusted, are not subject to the size-of-persons threshold and are reportable unless exempt. 3 Notification Thresholds: HSR notifications are generally required for transactions that will exceed a notification threshold where the size-of-persons threshold is met or does not apply, unless exempt.
CORPORATE INTERLOCK THRESHOLDS
Under the revised thresholds, one person may not serve simultaneously as an officer or director of competing corporations if each “interlocked” corporation has capital, surplus, and undivided profits aggregating more than $31,841,000 (originally, $10,000,000). The threshold amount applicable to the statutory “safe harbor” based on the dollar value of “competitive sales” has also been revised: a corporate interlock does not violate the statute if the “competitive sales” of either interlocked corporation are less than $3,184,100 (originally $1,000,000). The statutory safe harbors based on ratios of “competitive sales” to total sales remain unchanged.