February 17, 2020

February 17, 2020

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Revised Jurisdictional Thresholds Under the HSR Act and for the Prohibition of Interlocking Directorates

On Jan. 28, the Federal Trade Commission (FTC) published a notice to revise the premerger notification thresholds for mergers and acquisitions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). The FTC also published revisions to the thresholds that trigger, under Section 8 of the Clayton Act, a prohibition preventing companies from having interlocking memberships on their corporate boards of directors. These revisions represent the annual adjustment of thresholds based upon changes in the gross national product.

Revised HSR Act Thresholds

The initial threshold for a notification under the HSR Act will increase from $90 million to $94 million. For transactions valued between $90 million and $376 million (up from $359.9 million), the size of the person test will continue to apply. That test will now make the transaction reportable only where one party has sales or assets of at least $188 million (up from $180 million), and the other party has sales or assets of at least $18.8 million (up from $18 million). All transactions valued in excess of $376 million are reportable without regard to the size of the parties. The new thresholds will apply to any transaction that will close on or after Feb. 27, 2020.

The following chart summarizes the threshold adjustments:

In addition to adjusting upward the initial threshold for HSR notification, the amendments will adjust all subsequent notification thresholds as follows:


These notification threshold adjustments also adjust upward thresholds applicable to certain exemptions, such as those involving the acquisition of foreign assets or voting securities of foreign issuers.

Revised Section 8 Thresholds

The FTC also published revisions to the thresholds that trigger a prohibition preventing companies from having interlocking memberships on their corporate boards of directors under Section 8 of the Clayton Act. These revised thresholds are effective as of Jan. 21, 2020.

Section 8 prohibits a “person,” which can include a corporation and its representatives, from serving as a director or officer of two “competing” corporations, unless one of the following exemptions applies:

  • either corporation has capital, surplus, and undivided profits of less than $38,204,000 (up from $36,564,000);

  • the competitive sales of either corporation are less than $3,820,400 (up from $3,656,400);

  • the competitive sales of either corporation amount to less than two percent of that corporation’s total sales; or

  • the competitive sales of each corporation amount to less than four percent of each corporation’s total sales.

“Competitive sales” means “the gross revenues for all products and services sold by one corporation in competition with the other, determined on the basis of annual gross revenues for such products and services in that corporation’s last completed fiscal year.” “Total sales” means “the gross revenues for all products and services sold by one corporation over that corporation’s last completed fiscal year.”

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About this Author

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Andrew G. Berg Chairs the Global Antitrust Litigation & Competition Regulation Practice and advises clients on litigation, mergers and acquisitions, and other antitrust and competition-related matters before the Federal Trade Commission (FTC), the Antitrust Division of the Department of Justice (DOJ), state attorneys general, and in private litigation. Andrew's practice includes a full range of antitrust transactional and mergers and acquisitions experience, including Hart-Scott-Rodino filings at the FTC and DOJ, and related merger analysis issues. He also counsels...

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Stephen Pepper Antitrust Attorney Greenberg Traurig
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Stephen M. Pepper advises clients on the antitrust aspects of mergers, acquisitions and joint ventures. He has wide-ranging experience with the antitrust pre-acquisition reporting requirements of the Hart-Scott-Rodino (HSR) Act, including HSR Act implications of complex transactions involving private equity firms and hedge funds. He frequently advises clients on global merger clearance strategy for international transactions, including the coordination of international merger control filings and clearance efforts.

Stephen has obtained antitrust clearance from the U.S. Department of Justice, the Federal Trade Commission, and foreign merger control authorities for transactions in a variety of industries, including healthcare, telecom and media, engineering, electronics, software, semiconductor equipment, chemicals, retail stores, food and beverage, banking, publishing, and consulting.

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