UPDATE
Antitrust & Trade Regulation
DECEMBER 2000
Hart-Scott-Rodino Pre-Merger Notification Program Will
Exempt Additional Small Transactions and Increase Fees
Beginning February 1, 2001
INTRODUCTION
Effective February 1, 2001, the criteria for
transactions requiring the filing of a Hart-ScottRodino Pre-Merger Notification with the Federal
Trade Commission and the Antitrust Division of the
United States Department of Justice will change
materially. The structure of the required filing fees
will also change. The changes, which were approved
by Congress in December, 2000, and signed by the
President on December 21, 2000, will apply to
transactions closing on or after February 1, 2001 and
to filings made on or after that date.
The Hart-Scott-Rodino Antitrust Improvements Act
of 1976, 15 U.S.C. § 18a, requires that the parties to
certain acquisitions or mergers file specified
information about their transaction with the Federal
Trade Commission and the Antitrust Division before
consummating the transaction. Under the new
legislation, all transactions valued at less than $50
million will be exempt from such filings. To make up
for the decline in revenues resulting from the reduced
number of filings, a sliding scale of fees has been
adopted. Transactions valued at $100 million or more
will pay fees higher than the current $45,000 fee.
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No filing will be required for acquisitions of voting
stock or assets or for mergers where the
acquisition price and the market value of the
transaction are less than $50 million.
Filings will be mandatory for all acquisitions of
voting stock or assets and for all mergers where
the acquisition price or the market value of the
transaction is in excess of $200 million (unless a
specific exemption applies).
For acquisitions of assets or voting stock and for
mergers where the acquisition price or the market
value of the transaction exceeds $50 million but
neither the acquisition price nor the market value
of the transaction exceeds $200 million, a filing will
be required only if the parties meet one of the
following Size of Person Tests:
—
Where the Acquired Person is engaged in
manufacturing and has annual net sales or
total assets of $10 million or more and the
Acquiring Person has annual net sales or
total assets of $100 million or more; or
—
Where the Acquired Person is not engaged
in manufacturing and has total assets of $10
million or more and the Acquiring Person
has annual net sales or total assets of $100
million or more; or
—
Where the Acquired Person has annual net
sales or total assets of $100 million or more
and the Acquiring Person has annual net
sales or total assets or $10 million or more.
THE VALUE OF THE TRANSACTION IS THE
PRIMARY DETERMINANT OF THE NEED FOR
A FILING
For transactions consummated on or after
February 1, 2001, in which at least one of the parties
is engaged in interstate commerce or in any activity
affecting interstate commerce:
Kirkpatrick & Lockhart LLP
Beginning in 2004, these dollar thresholds will be
automatically increased to reflect the percentage
change in the gross national product since June
2003.
FILING FEES INCREASED
Presently Hart-Scott-Rodino filing fees are a flat rate
of $45,000. The new legislation creates a three-tiered
filing fee structure providing for increased fees for
larger transactions. Filing fees will now be calculated
in accordance with the following:
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CONCLUSION
These changes have the potential to have a
significant effect on the implementation of certain
mergers and acquisitions. While some parties may
wish to delay some transactions which will not
require a filing after February 1, 2001, others may
choose to accelerate those transactions which will be
subject to higher filing fees. The FTC will soon issue
rules in accordance with the new legislation and will
undoubtedly pay much closer attention to the
calculation of the value of reported transactions.
For transactions with a value under $100 million,
the filing fee remains $45,000.
For transactions in which the value is not less
than $100 million but is less than $500 million, the
filing fee is increased to $125,000.
For transactions valued at more than $500 million,
the filing fee is increased to $280,000.
The Antitrust and Trade Regulation Practice Group of Kirkpatrick & Lockhart LLP provides
antitrust counseling to clients on achieving business objectives while complying with the
antitrust laws. For more information on our antitrust services, contact one of the following
attorneys in the Pittsburgh office of K&L:
Thomas A. Donovan
James E. Scheuermann
Daniel J. Sponseller
412.355.6466
412.355.6215
412.355.8650
tdonovan@kl.com
jscheuermann@kl.com
dsponseller@kl.com
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This publication is for informational purposes and does not contain or convey legal advice. The information herein should
not be used or relied upon in regard to any particular facts or circumstances without first consulting with a lawyer.
© 2000 KIRKPATRICK & LOCKHART LLP.
ALL RIGHTS RESERVED.