HSR Transaction and Filing Fee Thresholds Adjusted
The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”) requires parties to stock and asset transactions that satisfy specified jurisdictional thresholds to provide the Federal Trade Commission (“FTC”)
and Department of Justice (“DOJ”) with information used to evaluate whether to raise antitrust objections to the proposed transaction. The parties must wait a designated period of time (usually 30 calendar days) after
providing that information before the proposed transaction can close. The FTC and DOJ frequently grant requests to terminate the waiting period early (particularly where there are no competition concerns), and also can extend the
waiting period (as part of a so-called “second request”).
When HSR was adopted in 1976, its jurisdictional thresholds, though set to capture relatively large transactions, were never indexed for inflation. As a result, by the late 1990’s smaller and smaller transactions were subject
to HSR compliance. Congress fixed this problem in 2001, as part of a broader amendment to HSR. That legislation also directed the FTC to adjust the various HSR jurisdictional thresholds for inflation, annually, beginning in 2005.
The FTC has announced the most recent adjustments to those HSR jurisdictional thresholds, set forth in the following table. These adjustments will be effective as of February 27, 2017, and will apply to all transactions that close on or after that effective date.
Summary of Adjustments to HSR Jurisdictional Tests |
||
HSR Test |
Old Threshold |
New Threshold |
Size-of-Parties
|
$156.3 million
|
$161.5 million
|
Size-of-Transaction |
$78.2 million |
$80.8 million |
Size-of-Transaction
|
$312.6 million |
$323.0 million |
Transactions are reportable if three distinct tests (commerce test, size-of-transaction test, and size-of-parties test) are satisfied and no exemption applies. Once these latest adjustments go into effect, the size-of-transaction test
will be satisfied if the buyer will hold voting securities or assets valued in excess of $80.8 million (up from $78.2 million) as a result of the transaction, and the size-of-parties test will be satisfied if one party has worldwide
annual net sales or worldwide total assets in excess of $161.5 million (up from $156.3 million) and the other party has in excess of $16.2 million (up from $15.6 million) in worldwide annual net sales or worldwide total assets. Further,
transactions valued in excess of $323.0 million (up from $312.6 million) could be reportable whether or not the size-of-parties test is satisfied.
The FTC also is adjusting the corresponding thresholds, based on the value of the transaction, used to determine the applicable HSR filing fee (the filing fees themselves are unchanged):
Summary of Adjustments to HSR Filing Fee Thresholds |
||
HSR Filing Fee |
Old Threshold |
New Threshold |
$45,000 |
Less than $156.3 million |
Less than $161.5 million |
$125,000 |
Less than $781.5 million |
Less than $807.5 million |
$280,000 |
$781.5 million or more |
$807.5 million or more |
Please contact Mitch Portnoy or Dan Anziska if you have questions regarding HSR requirements and compliance.
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