• Hart-Scott-Rodino Reporting Thresholds to Increase
  • February 5, 2005
  • Law Firm: Perkins Coie LLP - Seattle Office
  • On January 25, 2005, the Federal Trade Commission (the "FTC") announced that the reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "H-S-R Act" or the "Act") will be increased, as required by the 2000 amendments to the Act, effective March 2, 2005. The Act requires all parties to certain mergers or acquisitions, which meet or exceed the jurisdictional thresholds of the Act, to file notification with the FTC and the Antitrust Division of the Department of Justice and wait a designated period of time before consummating such transactions. The 2000 amendments require the FTC to revise the Act's jurisdictional and filing fee thresholds annually, based on the change in gross national product. Certain related thresholds and limitations in the H-S-R rules will also be adjusted. The revised thresholds will apply to all transactions that close on or after March 2, 2005.

    Reporting Thresholds

    Acquisitions of voting securities or assets are subject to the H-S-R Act if the transaction meets a two-part test based on the size of the transaction and the size of the parties. Presently, the Size-of-Transaction test is met if the transaction is valued at more than $50 million. Under current thresholds, the Size-of-Parties test is met if the ultimate parent entity (the "UPE") of one of the parties to the transaction has $10 million in total assets or annual net sales and another party to the transaction has $100 million in total assets or annual net sales. However, the Size-of-Parties test does not apply to transactions valued at more than $200 million.

    Under the new thresholds, the Size-of-Transaction test is met if the transaction is valued at more than $53.1 million. As amended, the Size-of-Parties test is met if the UPE of one of the parties has $10.7 million in total assets or annual net sales and another party to the transaction has $106.2 million in total assets or annual net sales. The threshold at which the Size-of-Parties test does not apply is increased to transactions valued in excess of $212.3 million.

    Filing Fees

    The 2000 amendments established a system of tiered filing fees based on the value of the transaction. The transaction values on which the tiered filing fee schedule is based will also be revised as shown in the chart below.

    Filing Fee Transaction Value
    (existing)
    Transaction Value
    (revised)
    $45,000 Less than $100 million Less than $106.2 million
    $125,000 $100 - < $500 million $106.2 - < $530.7 million
    $280,000 $500 million or more $530.7 million or more

    Other H-S-R Rules Revisions

    Although not required by the 2000 amendments to the Act, the FTC is also revising the H-S-R rules establishing the transaction values at which additional acquisitions become reportable to be consistent with the adjusted filing fee thresholds. Additional amendments to the H-S-R rules provide a method for future adjustments as required by the 2000 amendments and adjust references to the notification and filing fee thresholds and other limitations contained in the H-S-R rules to remain consistent with the revised jurisdictional and filing fee thresholds.