For those of you who are considering mergers, acquisitions or joint ventures, last week the Federal Trade Commission announced new thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) regarding the reportability of certain transactions. These thresholds identify the deals that must be reported to the antitrust agencies (the FTC and U.S. Department of Justice) for evaluation before they can close. But it is important to emphasize that transactions below these thresholds can violate the antitrust laws, and that the thresholds are not safe harbors for otherwise anticompetitive deals.
The FTC must revise the HSR thresholds annually based on changes in gross national product. The revised thresholds apply to transactions that close on or after the effective date, February 27, 2012.
Size of Transaction Test
Under the "Size of Transaction" test, no HSR filing is required unless the transaction results in an acquiring person holding an aggregate total amount of voting securities and/or assets of the acquired person in excess of $68.2 million (previously $66 million).
Transactions leading to the acquiring person holding more than $68.2 million, but less than or equal to $272.8 million (previously $263.8 million), are reportable only if the "Size of Parties" test is met (see below).
Transactions leading to the acquiring person holding in excess of $272.8 million are reportable regardless of the size of the parties.
Size of Parties Test
Under the "Size of Parties" test, transactions leading to the acquiring person holding more than $68.2 million, but less than or equal to $272.8 million are reportable if one party has annual net sales or total assets of $136.4 million or more (previously $131.9 million) and the other party has annual net sales or total assets of $13.6 million or more (previously $13.2 million).
For more information, please contact any of the attorneys in Venable's Antitrust Practice Group.