Antitrust Alert: U.S. 2017 Merger Notification and Interlocking Directorates Thresholds Announced
The Federal Trade Commission ("FTC") has announced the 2017 Hart-Scott-Rodino ("HSR") Act thresholds, which are scheduled for publication on January 26, 2017 and will take effect 30 days following publication. The HSR Act thresholds are used to determine when a transaction triggers premerger reporting requirements under the HSR Act, as well as to assess the application of certain exemptions to the HSR Act rules. The Federal Trade Commission has adjusted the thresholds annually since a 2000 amendment to the Act requiring the thresholds to keep pace with changes in the Gross National Product. The Commission also revises annually the jurisdictional thresholds that trigger the prohibition on interlocking directorates under Section 8 of the Clayton Act. The Section 8 thresholds will take effect immediately upon publication in the Federal Register on January 26.
Adjusted HSR Jurisdictional Thresholds
Size-of-Transaction threshold. An HSR Act 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 $80.8 million (the 2016 threshold was $78.2 million). If the Size-of-Transaction is between $80.8 million and $323 million, the transaction also must satisfy the Size-of-Person threshold. Transactions valued in excess of $323 million may require a filing without regard to the Size-of-Person threshold.
Size-of-Person threshold. A transaction meets the Size-of-Person threshold if either the acquired or acquiring person has annual net sales or total assets of at least $161.5 million and the other party to the transaction has at least $16.2 million in annual net sales or total assets.
New Interlocking Directorates Thresholds
Section 8 of the Clayton Act prohibits a single 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 the Section 8 prohibition if each one has capital, surplus, and undivided profits aggregating to more than $32,914,000 (Section 8(a)(1)). However, no corporation is covered if the competitive sales of either are less than $3,291,400 (Section 8(a)(2)(A)).
The Federal Register notice containing a complete list of these and additional related thresholds contained in the HSR rules (16 C.F.R. Parts 801-803) can be found on the Federal Trade Commission's website.
For more information, please contact your principal Jones Day representative or any of the lawyers listed below.
Bevin M. B. Newman
Pamela L. Taylor
Michael H. Knight
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