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FTC Announces 2019 Adjustment to HSR Filing Thresholds

The Federal Trade Commission (the “FTC”) has announced the annual adjustment for 2019 of notification thresholds for proposed mergers and acquisitions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). The FTC is required to adjust these thresholds annually, based on the yearly change in U.S. gross national product. The changes become effective 30 days after publication in the Federal Register.

The HSR Act size-of-transaction threshold will increase from $84.4 million to $90 million. A transaction may require HSR filing if, as a result of the transaction, the acquirer will hold voting securities and assets of the acquired valued at more than $90 million but not more than $359.9 million (the new size-of-transaction maximum, see below), and the size-of-parties thresholds are also met.

The HSR Act size-of-parties thresholds will increase from $168.8 million and $16.9 million to $180 million and $18 million, respectively. A transaction may require HSR filing if it is valued in excess of the size-of-transaction threshold up to and including the size-of-transaction maximum, and one party has annual net sales or total assets of at least $180 million and the other party has annual net sales or total assets of at least $18 million.

Any transaction with a value of greater than $359.9 million will require a HSR filing, regardless of the size of the parties, unless another exemption applies.

In the same release, the FTC also announced the adjustment of thresholds in Section 8 of the Clayton Act that trigger the prohibition on “interlocking directorates” - where one person serves as a director or officer of two competing corporations (subject to certain exceptions). The prohibition may apply when (1) each corporation has capital, surplus, and undivided profits aggregating more than $36,564,000, and (2) each corporation’s competitive sales are at least $3,656,400. These new thresholds will become effective when published in the Federal Register.

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About this Author

Bryan Prosek, Steptoe Johnson Law Firm, Columbus, Corporate and Finance Law Attorney
Member

Bryan Prosek chairs the firm's securities practice group.  He focuses his practice in the area of business transactions, including securities offerings and federal and state registration compliance, corporate and real estate matters, mergers and acquisitions, contracts, licenses and similar agreements, corporate governance, banking and finance, corporate and partnership tax matters, and non-profit tax-exempt matters.

614-458-9793
John Chadd, Steptoe Johnson Law Firm, Energy Transaction and Mineral Law Attorney
Of Counsel

John Chadd focuses his practice in the areas of energy transactional and mineral title law. He advises companies, investors, and lenders on a broad spectrum of oil and gas and energy transactions including finance, acquisitions and divestitures, development and operational matters as well as general mergers and acquisitions and renewable energy projects.  He also represents companies and lenders in lending and finance transactions across a wide array of industries. 

303-389-4316