Hart-Scott-Rodino Thresholds to Increase

Beginning on February 25, 2016, transactions valued at more than $78.2 million may require a Premerger Notification and Report under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“the HSR Act”). This number represents an increase from the current filing threshold of $76.3 million.

Pursuant to legislation adopted in 2000, the dollar values in the tests, which are used to determine which mergers and acquisitions must be filed with the Federal Trade Commission (“FTC”) and the Antitrust Division of the United States Department of Justice (“DOJ”), are adjusted annually for changes in the gross national product. In addition, the same adjustment factors are applied to the transaction-size criteria that determine the amount of the filing fee paid for transactions in which a filing is required.

The New Filing Thresholds
The HSR Act requires certain persons making acquisitions of assets, voting securities, and noncorporate interests (i.e., interests in partnerships and limited liability companies) to (a) file premerger notifications with the FTC and the DOJ and (b) wait until the expiration of a waiting period (usually 30 days) before consummating the acquisition.

After the effective date of the amendment to the rules, the following transactions will generally be subject to the HSR Act’s notification and waiting period requirements:

• Transactions in which the acquirer will acquire or hold voting securities, assets and non-corporate interests of the target company that have an aggregate value in excess of $312.6 million. [1]
• Transactions in which the acquirer will acquire or hold voting securities, assets, and noncorporate interests of the target company with an aggregate value in excess of $78.2 million but not more than $312.6 million, provided that either the acquiring or the acquired person has net sales or total assets of $156.3 million or more and the other person in the transaction has net sales or total assets in excess of $15.6 million.
• All transactions valued at $78.2 million or less need not file under the HSR Act. However, in determining the “value” of a transaction, the acquiring person must include the value of certain voting securities, assets, or noncorporate interests of the target company that the acquiring person may have acquired in one or more prior transactions.

Although a premerger notification may be required prior to the acquisition of as little as $78.2 million in voting securities, a person who files a notification for an acquisition at that level would have to file additional notifications for the acquisition of additional voting securities before crossing further thresholds of (a) $156.3 million, (b) $781.5 million, (c) 25 percent of voting securities of an entity worth $1,563 million or more, and (d) 50 percent of voting securities of an entity valued at $78.2 million or more.

The New Fee Thresholds
The thresholds for the various levels of filing fees will also change:

Fee                        Size-of-Transaction
$45,000                 If the size-of-transaction is valued at more than $78.2 million but less than $156.3 million
$125,000               If the size-of-transaction is valued at $156.3 million or more but less than $781.5 million
$280,000               If the size-of-transaction is valued at $781.5 million or more

The thresholds discussed in this alert shall apply for about one year, as they will again be recalculated in early 2017 based upon the 2016 gross national product.