Antitrust and Trade Regulation Alert
January 2008
Authors:
www.klgates.com
Hart-Scott-Rodino Thresholds Increased
Thomas A. Donovan
+1.412.355.6466
thomas.donovan@klgates.com
Ryan Demotte
+1.412.355.6466
thomas.donovan@klgates.com
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Introduction
Beginning on February 28, 2008, transactions valued at $63.1 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 Federal Trade Commission
(“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 which 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.
Effective February 28, 2008, the following transactions will generally be subject to the HSR
Act’s notification and waiting period requirements.
Transactions in which the acquirer will acquire or hold voting securities, assets and
non-corporate interests of the target company which have an aggregate value of
$252.3 million or more;1 and
Transactions 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
$63.1 million but not more than $252.3 million, provided that either the acquiring
or the acquired person has net sales or total assets of $126.2 million or more and
the other person in the transaction has net sales or total assets in excess of $12.6
million.
n
n
All transactions valued at $63.1 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 premerger notification may be required prior to the acquisition of as little as $63.1
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) $126.2 million, (b) $630.8 million, (c) 25% of voting
An acquiring person purchasing non-corporate interests must obtain as a result of the acquisition the right to fifty percent (50%) or more of the profits of the non-corporate entity or the right in the event of a dissolution to fifty percent (50%) 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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Antitrust and Trade Regulation Alert
securities of an entity worth $1.2615 billion or more,
and (d) 50% of voting securities of an entity valued at
$63.1 million or more.
The New Fee Thresholds
The thresholds for the various levels of filing fees
will also change:
Fee
$45,000
Size-of-Transaction
If the size-of-transaction is valued at more than $63.1 million but
less than $126.2 million;
$125,000
If the size-of-transaction is valued at $126.2 million or more but less
than $630.8 million;
$280,000
If the size-of-transaction is valued at $630.8 million or more.
The thresholds discussed in this alert shall apply for
one year because they will be recalculated based upon
the gross national product in 2009.
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