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HSR Notification Thresholds Increase for 2020

The Federal Trade Commission (“FTC”) has announced the annual revisions to the Hart-Scott-Rodino Antitrust Improvements Act (“HSR Act”) thresholds, which will become effective on February 27, 2020. The revised thresholds will apply to any merger or acquisition closing on or after the effective date. The FTC is required to adjust the HSR thresholds annually based upon the change in gross national product. 

Under the HSR Act, when a deal satisfies the “size of person” and “size of transaction” thresholds, and no exemption from reporting is available, the deal must be reported to the FTC and the U.S. Department of Justice and the parties must wait for a designated period of time before closing the transaction.

Size of Person. The revised size of person thresholds will generally be met if one party involved in the deal has assets or annual sales totaling $188 million or more and one other party involved in the deal has assets or annual sales of at least $18.8 million. Satisfaction of the size of person thresholds is not required, however, if the transaction is valued at more than $376 million.

Size of Transaction. The revised size of transaction threshold will be met if the buyer will hold an aggregate amount of stock, non-corporate interests and/or assets of the seller valued at more than $94 million as a result of the deal.  

The notification thresholds applicable to purchases of voting securities also will increase:

February 1, 2001
Thresholds (Original)

Current Thresholds as of
April 3, 2019

New Thresholds Effective
February 27, 2020

$50 million

$90 million

$94 million

$100 million

$180 million

$188 million

$500 million

$899.8 million

$940.1 million

25% if worth more than
$1 billion

25% if worth more than
$1.799.5 billion

25% if worth more than
$1,880.2 million

50% if worth more than
$50 million

50% if worth more than
$90 million

50% if worth more than
$94 million

The adjustments also affect the transaction-size benchmarks that determine the amount of the filing fee to be paid when a filing is required. In addition, the thresholds applicable to many exemptions, including those governing foreign acquisitions, will increase. The $500 million thresholds applicable to acquisitions of producing oil and gas reserves and associated assets will not change.

The civil penalty for failing to comply with the notification and waiting period requirements of the HSR Act has also increased to up to $43,280 per day for each day a party is in violation. 

© 2020 Bracewell LLP

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About this Author

Daniel Hemli, Antitrust Litigation, Attorney, Bracewell law firm
Partner

Daniel Hemli advises clients on antitrust issues relating to mergers, acquisitions and joint ventures, and advocacy before federal, state and foreign antitrust authorities. He has represented parties in connection with investigations of numerous national and multinational acquisitions and joint venture transactions across a broad range of industries, including oil and gas, electric power, pharmaceuticals, medical devices, technology and software, chemicals, financial services, commercial and industrial equipment, consumer goods, media, and agriculture. He has advised on...

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Jacqueline Java, Antitrust, Attorney, Bracewell law firm
Counsel

Jacqueline (Jackie) Java focuses her practice on antitrust counseling. She advises clients involved in transactions and day-to-day operations that raise antitrust issues regarding interactions among competitors, the formation of joint ventures, distribution and pricing policies and programs, information exchanges, and allegations of price fixing, market allocation, and other anticompetitive practices. She is particularly experienced in managing complex relationships in industries where companies simultaneously act as competitors, customers and collaborators.

Ms. Java has served as antitrust counsel for numerous transactions, and is experienced in all antitrust aspects of mergers and acquisitions, from initial antitrust analyses and the preparation of Hart-Scott-Rodino filings, through government investigations and Second Requests. She also has assisted with filings required by foreign antitrust authorities. Ms. Java has counseled many clients on the antitrust pitfalls associated with due diligence and integration planning in connection with mergers, particularly where the parties operate in highly concentrated industries. She also has represented clients in Federal Trade Commission, Department of Justice and other federal regulatory authority investigations into allegedly anticompetitive activities.

202-828-5828