Antitrust Alert:  Federal Trade Commission Announces U.S. Merger Notification and Interlocking Directorates Thresholds For 2014

Antitrust Alert: Federal Trade Commission Announces U.S. Merger Notification and Interlocking Directorates Thresholds For 2014

As published on January 23, 2014 in the Federal Register, the U.S. Federal Trade Commission has issued the required annual revisions to the Hart-Scott-Rodino ("HSR") Act thresholds that are used to determine when a transaction triggers premerger reporting requirements. The new HSR Act thresholds will take effect on February 24, 2014. The Commission also issued revised jurisdictional thresholds that trigger the prohibition on interlocking directorates under Section 8 of the Clayton Act, which take effect today. The FTC adjusts all such thresholds based on the change in the gross national product from year to year.

Adjusted HSR jurisdictional thresholds

Size-of-Transaction threshold. An HSR filing may be required if the acquirer will hold, as a result of the transaction, voting securities, non-corporate interests and assets of the acquired person valued in excess of $75.9 million. If the Size-of-Transaction is between $75.9 million and $303.4 million, the transaction also must satisfy the Size-of-Persons threshold. Transactions valued in excess of $303.4 million may require a filing without regard to the Size-of-Person threshold.

Size-of-Person threshold. If the value of the securities, non-corporate interest and assets held as a result of a transaction is between $75.9 million and $303.4 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 $151.7 million and the other party to the transaction has at least $15.2 million in annual net sales or total assets.

A complete list of additional related thresholds contained in the HSR rules (16 C.F.R. Parts 801-803) were published yesterday in the Federal Register and also can be found on the Federal Trade Commission's website.

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 $29,945,000 (Section 8(a)(1)). However, no corporation is covered if the competitive sales of either are less than $2,994,500 (Section 8(a)(2)(A)).

The Federal Register notice is available here.

Lawyer Contacts 

For more information, please contact your principal Jones Day representative or either of the lawyers listed below. 

Bevin M.B. Newman

Pam Taylor

Tom D. Smith

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