Antitrust Alert: Merger Notification Thresholds Increase in 2018
The 2018 adjustments to the Hart-Scott-Rodino ("HSR") Act thresholds take effect February 28, 2018, and will remain in effect through January 2019. The thresholds, which are used to determine when a transaction triggers premerger reporting requirements, as well as to assess the application of certain exemptions to the HSR Act rules, are adjusted each year by the Federal Trade Commission. The Commission also revises annually the jurisdictional thresholds that trigger the prohibition on interlocking directorates under Section 8 of the Clayton Act, which take effect on January 29, 2018. 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 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 $84.4 million (the 2017 threshold was $80.8 million). If the Size-of-Transaction is between $84.4 million and $337.6 million, the transaction also must satisfy the Size-of-Person threshold. Transactions valued in excess of $337.6 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 $168.8 million and the other party to the transaction has at least $16.9 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 $34,395,000 (Section 8(a)(1)). However, no corporation is covered if the competitive sales of either are less than $3,439,500 (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
Michael H. Knight
John W. Magruder, an associate in the Washington Office, assisted with the preparation of this Alert.
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