Antitrust and Trade Regulation Alert
January 2009
Authors:
Brian K. McCalmon
brian.mccalmon@klgates.com
202.661.6230
Thomas A. Donovan
thomas.donovan@klgates.com
412.355.6466
Ryan D. DeMotte
ryan.demotte@klgates.com
412.355.6440
K&L Gates comprises approximately
1,700 lawyers in 28 offices located in
North America, Europe and Asia, and
represents capital markets participants,
entrepreneurs, growth and middle
market companies, leading FORTUNE
100 and FTSE 100 global corporations
and public sector entities. For more
information, visit www.klgates.com.
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Hart-Scott-Rodino Thresholds to Increase
Beginning in late February 2009 (the actual date depends upon the date the Federal Trade
Commission’s (FTC) notice is published in the Federal Register), transactions valued at
$65.2 million or less will be exempt from the premerger notification process under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act).
Pursuant to legislation adopted in 2000, the dollar values in the tests that are used to
determine what mergers and acquisitions must be filed with the FTC and Antitrust Division
of the United States Department of Justice (DOJ) are adjusted annually for changes in
the gross national product. In addition, the same adjustment factors are applied to the
transaction-size criteria that determine the amount of the filing fee paid for transactions
in which a filing is required.
The New Filing Thresholds
The HSR Act requires certain persons making acquisitions of assets, voting securities and
non-corporate interests (i.e., interests in partnerships and limited liability companies) (a) to
file premerger notifications with the FTC and the DOJ, and (b) to wait until the expiration
of a waiting period (usually 30 days) before consummating the acquisition.
After the effective date of the amendment to the rules, the following transactions will
generally be subject to the HSR Act’s notification and waiting period requirements:
• T
ransactions in which the acquirer will acquire or hold voting securities, assets and
non-corporate interests of the target company that have an aggregate value of $260.7
million or more1; and
• T
ransactions in which the acquirer will acquire or hold voting securities, assets and
non-corporate interests of the target company with an aggregate value in excess of
$65.2 million but not more than $260.7 million, provided that either the acquiring
or the acquired person has net sales or total assets of $130.3 million or more and the
other person in the transaction has net sales or total assets in excess of $13 million.
All transactions valued at $65.2 million or less will be exempt from the notification process
under the HSR Act. However, in determining the “value” of a transaction, the acquiring
person must include the value of certain voting securities, assets, or non-corporate interests
of the target company that the acquiring person may have acquired in one or more prior
transactions.
Although a pre-merger notification may be required prior to the acquisition of as little as
$65.2 million in voting securities, a person who files a notification for an acquisition at
that level would have to file additional notifications for the acquisition of additional voting
securities before crossing further thresholds of (a) $130.3 million, (b) $651.7 million, (c) 25
percent of voting securities of an entity worth $1,303,400,000 or more, and (d) 50 percent
of voting securities of an entity valued at $65.2 million or more.
Antitrust and Trade Regulation Alert
The New Fee Thresholds
The thresholds for the various levels of filing fees will
also change:
Fee Size-of-Transaction
$45,000If the size-of-transaction is valued
at more than $65.2 million but
less than $130.3 million
$125,000If the size-of-transaction is valued
at $130.3 million or more but less
than $651.7 million
$280,000If the size-of-transaction is valued
at $651.7 million or more
The thresholds discussed in this alert shall apply for
one year, because they will be recalculated in 2010
based upon the gross national product.
Endnote
1
n acquiring person purchasing non-corporate interests must
A
obtain as a result of the acquisition the right to 50 percent or more
of the profits of the non-corporate entity or the right in the event of
a dissolution to 50 percent or more of its assets after the payment
of its debts for a premerger notification filing to be required under
the HSR Act. Such acquisitions are deemed to be acquisitions of
the underlying assets of the acquired person.
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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 a lawyer.
©2009 K&L Gates LLP. All Rights Reserved.
January 2009 | 2