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The Federal Trade Commison's New Hart-Scott-Rodino Act: New filing thresholds will significantly impact 2013 deals

The Federal Trade Commission (“FTC”) recently announced the 2013 filing thresholds under the Hart-Scott-Rodino Act (“HSR”). The thresholds determine whether parties involved in mergers, acquisitions, transfers of voting securities or unincorporated interests, or other transactions, such as exclusive licensing deals or joint ventures, must notify the FTC and the Department of Justice of the proposed transaction. Deals that meet the HSR filing thresholds must be reported (absent any applicable exemptions) to the agencies, and the parties must comply with a mandatory waiting period before consummating the transaction to allow the agencies to determine whether the transaction raises potential antitrust/competitive concerns. 

The HSR filing thresholds are adjusted each year based on changes in the gross national product. The 2013 filing thresholds take effect on February 11, 2013. Any deal reported before that date remains subject to the 2012 filing thresholds. 

For 2013, the filing thresholds are:

Deal Value

Size of Person Test

Reportablilty

Less than $70.9 million

Not applicable

Generally not reportable

$70.9 million but less than $283.6 million

One party has net sales or assets of at least $14.2 million and the other party has net sales or assets of at least $141.8 million

Generally reportable if size of person test is met.

$283.6 million or greater

Not applicable

Generally reportable

For purposes of the “Size of Person” test, the net sales or assets of each party’s “ultimate parent” (including all entities controlled by the parent) is considered as the party’s net sales or assets. 

The FTC also announced an increase in HSR filing fees, effective the same day. The new HSR filing fees are:

Deal Value

Filing Fee

At least $70.9 million but less than $141.8 million

$45,000

At least $141.8 million but less than $709.1 million

$125,000

$709.1 million or greater

$280,000

The HSR Act has certain exceptions that can exempt facially reportable transactions from HSR filing requirements. Parties should be mindful of these exemptions and other HSR rules when determining whether a filing is required.

© 2014 Dinsmore & Shohl LLP. All rights reserved.

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About this Author

Associate

Tammy Imhoff is an Associate in the Corporate Department. Tammy concentrates her practice on corporate law and transactions, including mergers and acquisitions, antitrust and competition law counseling, preparation and review of contracts, forming new businesses, and general corporate governance matters.
 

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