On 26 January 2018, the Federal Trade Commission (FTC) released the annual jurisdictional adjustments for premerger notification filings made pursuant to Section 7A of the Clayton Act, known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act), as well as for Section 8 of the Clayton Act. The new filing thresholds for HSR notification will become effective 28 February 2018 (30 days after today’s publication in the Federal Register), while the revisions to Section 8 became effective immediately upon today’s publication in the Federal Register.
HSR notification thresholds
Under the HSR Act, certain acquisitions of assets, voting securities, or interests in non-corporate entities are subject to premerger notification filing and waiting period requirements if the applicable jurisdictional thresholds are satisfied and no exemption applies.
Each year the FTC adjusts the HSR jurisdictional threshold tests based on changes to the U.S. gross national product. The threshold changes do not affect the amount of the applicable HSR filing fees to be paid, but do affect the threshold levels applicable to each of the filing fees.
The principal changes to the HSR jurisdictional thresholds will be as follows:
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Current threshold |
New threshold
(effective 28 February 2018) |
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Size-of-transaction threshold test
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Notification may be required if acquiring person will acquire and hold certain assets, voting securities, or interests in non-corporate entities valued at more than US$80.8 million. |
US$84.4 million
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Size-of-person threshold test |
Generally, one “person” to the transaction must have at least US$161.5 million in total assets or annual net sales, and the other must have at least US$16.2 million in total assets or annual net sales. |
At least US$168.8 million and US$16.9 million in total assets or annual net sales.
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Transactions valued at more than US$323.0 million are not subject to the size-of-person threshold test and are therefore reportable unless exempt. |
US$337.6 million
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Filing fee threshold levels |
HSR filing fee of US$45,000 for transactions where the acquiring person will hold an aggregate total amount of assets, voting securities, or controlling non-corporate interests valued at more than US$80.8 million but less than US$161.5 million. |
More than US$84.4 million but less than US$168.8 million.
HSR filing fees remain unchanged.
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HSR filing fee of US$125,000 for transactions where the acquiring person will hold an aggregate total amount of assets, voting securities, or controlling non-corporate interests valued at US$161.5 million or more but less than US$807.5 million.
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US$168.8 million or more but less than US$843.9 million.
HSR filing fee remains unchanged.
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HSR filing fee of US$280,000 for transactions where the acquiring person will hold an aggregate total amount of assets, voting securities, or controlling non-corporate interests valued at US$807.5 million or more. |
US$843.9 million or more.
HSR filing fee remains unchanged.
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Notification thresholds |
When completing an HSR filing, the acquiring person in a voting securities acquisition must indicate which notification threshold it will cross – US$80.8 million, US$161.5 million, US$807.5 million, 25% (if the value of the voting securities to be held is greater than US$1,615.0 million) or 50%. These notification thresholds are also relevant to a certain HSR exemption. |
The new notification thresholds are US$84.4 million, US$168.8 million, US$843.9 million, 25% (if the value of the voting securities to be held is greater than US$1,687.8 million), or 50%.
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Interlocking directorates threshold
Section 8 of the Clayton Act prohibits a person from serving as a director or officer of two competing corporations if certain thresholds are satisfied and no exemption applies. The FTC is required to adjust annually certain thresholds related to Section 8 based on changes to the gross national product.
Under the new thresholds, which are effective immediately upon today's publication in the Federal Register, a person may not serve as a director or officer of competing corporations if each corporation has capital, surplus, and undivided profits aggregating more than US$34,395,000, unless one of the corporations has competitive sales of less than US$3,439,500. Previously, a person was prohibited from serving as a director or office of competing corporations if each corporation had capital, surplus, and undivided profits aggregating more than US$32,914,000 unless one of the corporations had competitive sales of less than US$3,291,400.
