Antitrust Alert: U.S. Merger Notification and Interlocking Directorates Thresholds Increased
On January 24, 2012, the Federal Trade Commission announced revised thresholds for Hart-Scott-Rodino ("HSR") Premerger Notification filings and for the jurisdictional thresholds that trigger the prohibition on interlocking directorates under Section 8 of the Clayton Act. These thresholds are revised annually to reflect changes in the gross national product.
The revised HSR thresholds will apply to all transactions that close on or after the effective date, which is 30 calendar days following publication of the changes in the Federal Register. This effective date is expected to be in late February. The Interlocking Directorates threshold revisions will be published in the Federal Register shortly and will be effective upon publication.
New HSR Thresholds
Size-of-Transaction Test. An HSR filing may be required if the acquiror will hold, as a result of the transaction, voting securities or assets of the acquired person in excess of $68.2 million, and the Size-of-Person test must be met, unless the value of the securities or assets exceeds $272.8 million, in which case the parties must report the transaction notwithstanding the size of the parties.
Size-of-Person Test. If the value of the securities and assets held as a result of the transaction is between $68.2 million and $272.8 million, the transaction must be reported in most cases if either the acquired or acquiring person has annual net sales or total assets of at least $136.4 million and the other party to the transaction has at least $13.6 million in annual net sales or total assets.
HSR Filing Fee
There is no change in the HSR filing which remains:
|$45,000||valued in excess of $68.2 million but less than $136.4 million|
|$125,000||valued at $136.4 million or greater but less than $682.1 million; or|
|$280,000||valued at $682.1 million or greater|
Both the Federal Register notice and the FTC press release make a point of noting that, unlike the thresholds, the HSR filing fee is not indexed and has not been increased in more than ten years.
New Interlocking Directorates Thresholds
Section 8 of the Clayton Act prohibits the same person from serving as an officer or director of competing corporations if certain thresholds are met. Based on the revised thresholds, competitor corporations are covered by Section 8 if each one has capital, surplus, and undivided profits aggregating more than $27,784,000 (Section 8(a)(1)), except that no corporation is covered if the competitive sales of either are less than $2,778,400 (Section 8(a)(2)(A)).
The Federal Register Notices are available on the FTC's website here.
For more information, please contact your principal Jones Day representative or either of the lawyers listed below.
Tom D. Smith
Bevin M.B. Newman
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