FTC Raises Monetary Thresholds For Mergers

On January 24, 2012, the Federal Trade Commission (FTC) announced revised Hart-Scott-Rodino Act (HSR) reporting thresholds under which transactions will be reportable only if, as a result of such transaction, the acquiring person will hold voting securities, assets, or non-corporate interests of the acquired person valued above $68.2 million, compared to $66.0 million in 2011.  The newly adjusted thresholds will apply to all transactions that close on or after the effective date, which is expected to be in late February (the exact date will depend on when the changes are published in the Federal Register).

In summary, the relevant HSR thresholds are:

Corresponding increases will also apply to certain other thresholds and exemptions under the HSR Act.  The complete list of revised HSR thresholds is available on the FTC's website (http://www.ftc.gov/opa/2012/01/hsr.shtm).

For reportable transactions, the acquiring person’s holdings must cross the threshold with respect to which the HSR notification is made within one year of the expiration or early termination of the HSR waiting period.  Once the acquiring person has crossed the applicable threshold during the first year, any additional acquisitions by the same acquiring person of the same issuer’s voting securities will be exempt from notification during the five years following the expiration or early termination of the waiting period, up to the highest value of the threshold range for which the HSR notification was made.  For purposes of this exemption, any subsequent acquisition by the acquiring person would be subject to the adjusted thresholds in effect when the subsequent acquisition is consummated.

Though recently there has been discussion about raising the HSR filing fees, for now they remain as follows:

The FTC also announced revised safe-harbors for interlocking memberships on corporate boards of directors under Section 8 of the Clayton Act. The new thresholds for the Clayton Act's prohibition on interlocking directorates are $27,784,000 for Section 8(a)(1) and $2,778,400 for Section 8(a)(2)(A)