Advertisement

April 20, 2014

FTC Raises Hart­-Scott­-Rodino Thresholds

Transactions closing as of February 11 will be subject to increased HSR Act jurisdictional and filing fee thresholds.

On January 10, the Federal Trade Commission (FTC) announced that it will raise the Hart-Scott-Rodino Act (HSR Act) jurisdictional and filing fee thresholds.[1] Any transaction closing as of February 11, 2013, will be subject to the revised thresholds. The new rules include an increase in the "size of transaction" test from transactions valued at greater than $68.2 million to transactions valued at greater than $70.9 million—which means that, under the new threshold, acquisitions valued for HSR Act purposes at $70.9 million or less will not require preclosing filing and approval.

New Jurisdictional Thresholds

As a general rule, the HSR Act requires both Acquiring and Acquired Persons (as defined in the HSR Act) to file notifications if the followingpost-adjustment jurisdictional thresholds are met:

  1. One person has net sales or total assets of at least $14.2 million.
  2. The other person has net sales or total assets of at least $141.8 million.
  3. As a result of the transaction, the Acquiring Person will hold an aggregate amount of stock and assets of the Acquired Person valued at more than $70.9 million.
    or
  4. As a result of the transaction, the Acquiring Person will hold an aggregate amount of stock and assets of the Acquired Person valued at more than $283.6 million, regardless of the sales or assets of the Acquiring and Acquired Persons.

Conditions 1 and 2 are generally referred to as the "size of person" test, while conditions 3 and 4 are commonly described as the "size of transaction" test.

The HSR Act rules relating to acquisitions of partnership interests and membership interests in a limited liability company (LLC) remain the same. Only acquisitions of economic control in an LLC or partnership may be reportable. "Control" is defined as having a right to 50% or more of the profits of a partnership or LLC or 50% or more of the assets upon the dissolution of such entity.

New Filing Fee Thresholds

Filing fees are also determined by a threshold test relating to the size of the transaction. While the valuation thresholds have changed, the fees themselves have not been adjusted:

Valuation of Transaction

Filing Fee

In excess of $70.9 million or greater, but less than $141.8 million

$45,000

$141.8 million or greater, but less than $709.1 million

$125,000

$709.1 million or greater

$280,000

The figures above represent the new "as adjusted" threshold figures. The table below illustrates the changes.

Current Threshold 
(in millions)

"As Adjusted"
Threshold
(in millions)

$13.6

$14.2

$68.2

$70.9

$136.4

$141.8

$272.8

$283.6

$682.1

$709.1

These changes are being implemented pursuant to the 2000 amendments to section 7A of the Clayton Antitrust Act. Section 7A(a)(2) of the Clayton Antitrust Act requires the FTC to revise the jurisdictional thresholds annually, based on the change in gross national product, in accordance with section 8(a)(5). The revised thresholds will apply to all transactions that close on or after the effective date.


[1]. Read the FTC's announcement here.

Copyright © 2014 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

About the Author

Morgan Lewis’s Antitrust Practice is one of the largest and most diversified in the world. Our Antitrust Practice is distinguished by its substantial scope and depth, our base of knowledge and experience, and our international capability. We provide the full spectrum of antitrust services, from preventive counseling to advice on complex issues to defense of "bet the company" litigation.

In our client representations, we have tackled the most difficult antitrust problems in all sectors of the global economy. For example, we have handled:

    ...
202.739.5211

Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is www.NatLawReview.com  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.