On January 21, the Federal Trade Commission announced the annual adjustment of the thresholds that trigger reporting obligations (and the mandatory waiting period) under the Hart-Scott Rodino (HSR) Act. The new thresholds become effective February 24, 2011 and will remain in effect until next year’s announcement.
Under the new thresholds, acquisitions that result in the buyer's holding –
- less than $66 million in voting securities and/or assets of the seller will not be reportable (subject to the rules on aggregation).
- more than $66 million but less than $263.8 million are reportable if the “size of persons” test is satisfied.1
- more than $263.8 million are reportable regardless of the size of persons.
The increases also affect some of the exemptions from reporting requirements (most particularly the exemptions for certain acquisitions of foreign issuers or foreign assets).
The HSR filing fees have not increased, but the levels that trigger larger filing fees have increased.
- The basic filing fee remains $45,000 and is payable on transactions valued at more than $66 million but less than $131.9 million.
- For transactions valued at more than $131.9 million but less than $659.5 million, the filing fee is $125,000.
- For transactions valued at more than $659.5 million, the filing fee is $280,000.
The new thresholds for the Act’s prohibition on interlocking directorates are $26,867,000 for Section 8(a)(1) and $2,686,700 for Section 8(a)(2)(A).
The FTC announcement did not address the proposed new notification form. Last August the FTC had announced several proposed revisions to the form (including, for example, elimination of the requirement to report revenues for a “base year”). The public comment period ended on October 18, 2010, and a decision on the new form is still pending.
1The “size of persons” test requires that one “person” have at least $131.9 million in annual net sales or total assets and the other “person” have $13.2 million in total assets (or, in some cases, annual net sales). “Person” means the ultimate parent of the legal party to a transaction, and all entities controlled by the ultimate parent.