• Revised Hart-Scott-Rodino Thresholds Become Effective on February 11, 2013
  • January 31, 2013 | Authors: David H. Roe; Thomas M. Worthington
  • Law Firm: McGrath North Mullin & Kratz, PC LLO - Omaha Office
  • The Federal Trade Commission (FTC) recently released the revised thresholds used in determining whether parties to certain acquisition transactions are required to comply with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).  The thresholds are revised on an annual basis by the FTC to reflect changes in the gross national product.  The revised thresholds will become effective on February 11, 2013.

    Effective February 11, 2013, the $50 million “Size of Transaction” threshold for HSR Act reporting purposes will increase to $70.9 million for 2013 (up from $68.2 million in 2012). 

    The HSR Act generally requires parties to certain acquisition transactions (including, without limitation, acquisitions of assets, stock and other equity interests, certain joint venture formations and other business combinations) to: (a) notify the FTC and the Department of Justice (DOJ) of the proposed transaction through a pre-acquisition filing; and (b) observe the waiting period (typically 30 days from the date of the pre-acquisition filing) before consummating the proposed transaction.

    Most commonly, an acquisition transaction is subject to the HSR Act if both the “Size of Person” and the “Size of Transaction” tests are satisfied.

    Size-of-Person:  Generally satisfied if one party to the transaction has more than $141.8 million (up from $136.4 million in 2012) in annual net sales or total assets, and the other party has more than $14.2 million (up from $13.6 million in 2012) in annual net sales or total assets.1  

    Size of Transaction:  Generally satisfied if, as a result of the transaction, the acquiring party will hold more than $70.9 million (up from $68.2 million in 2012) of voting securities or assets of the acquired party.  Note that the “Size of Person” test does not need to be separately satisfied if, as a result of the transaction, the acquiring party will hold more than $283.6 million (up from $272.8 million in 2012) of voting securities or assets of the acquired party.

    Also effective February 11, 2013, the filing fees for pre-acquisition filings pursuant to the HSR Act shall be as follows:

    Value of Assets / Voting Securities Acquired 

     

    Filing Fee

    $70.9 million to less than $141.8 million

     

    $45,000

    $141.8 million to less than $709.1 million

     

    $125,000

    Greater than $709.1 million

     

    $280,0002


    Please note that numerous exemptions and aggregation calculations may apply when determining, among other things: (a) whether a pre-acquisition filing is required pursuant to the HSR Act; and (b) the correct filing fee for the filing.  In addition, those that fail to comply with the requirements of the HSR Act are subject to a statutory penalty of up to $16,000 per day of non-compliance.  Therefore, parties to an acquisition transaction should seek the guidance of qualified legal counsel to assist with the appropriate analysis.