FTC Revises Premerger Notification Thresholds under HSR Act

This posting was written by Jeffrey May, editor of CCH Trade Regulation Reporter.

The FTC has revised the thresholds for premerger notification filings under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976. The HSR Act requires all persons contemplating mergers or acquisitions, which meet or exceed the jurisdictional thresholds in the Act, to notify the FTC and the Department of Justice Antitrust Division and to wait the statutory 30-day period before consummating the transactions.

Section 7A of the Clayton Act requires the agency to revise the jurisdictional thresholds annually, based on the change in gross national product. The thresholds were revised for the first time in 2005. The most recent revisions will take effect on February 22, 2007. Details of the revised thresholds appeared in the January 22 issue of the Federal Register.

The revised thresholds require reporting of all acquisitions that result in an acquirer holding an aggregate total amount of the voting securities and assets of the acquired party in excess of $239.2 million, unless otherwise exempted. That threshold was revised upward from its current $226.8 million. No transaction resulting in an acquiring person holding $59.8 million or less (currently $56.7 million or less) of assets or voting securities of an acquired person will need to be reported under the rules.

Acquisitions valued between these thresholds are reportable based on the size of the acquiring or acquired person. The thresholds in this "size-of-person" test will also be increased. Generally, the "size-of-person" test will require that one side of the transaction have sales or assets in excess of $119.6 million ($113.4 million currently) and the other have sales or assets in excess of $12 million ($11.3 million currently).

The filing fees themselves remain the same. Once the threshold adjustments are effective, a $45,000 filing fee will apply to transactions valued between $59.8 million and $119.6 million. The $125,000 filing fee will apply to transactions valued between $119.6 million and $597.9 million. The $250,000 filing fee will apply to transactions valued at $597.9 million or more.