2018 Hart-Scott-Rodino Thresholds

The U.S. Federal Trade Commission (FTC) has announced its annual revisions to the notification and filing fee thresholds of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).¹ The HSR Act is an antitrust statute that authorizes the FTC and the Antitrust Division of the Department of Justice (DOJ) to evaluate the potential anticompetitive effects of certain merger and acquisition transactions. The HSR Act requires the parties contemplating mergers or acquisitions that meet or exceed jurisdictional thresholds to (i) provide information to the FTC and DOJ regarding the acquisition and the parties' business operations, and (ii) await the expiration or early termination of a statutory waiting period before completing the proposed transaction. The FTC revises the thresholds annually on the basis of U.S. gross national product.

New HSR Thresholds

The following table lists the original, current and revised HSR thresholds.² The new thresholds are effective on February 28, 2018.

Under the revised thresholds, an acquisition is subject to the notification and waiting period requirements of the HSR Act if, as a result of the transaction, the buyer will hold assets, voting securities, or non-corporate interests of the target with a value in excess of $84.4 million (size-of-transaction test), and the parties to the transaction have total assets or annual net sales in excess of $16.9 million and $168.8 million (size-of-person test).

The size-of-person test does not apply to transactions involving the acquisition of assets, voting securities or non-corporate interests valued in excess of $337.6 million.

Below is an updated schedule of HSR filing fees for 2018. Only the transaction-size thresholds have changed, not the amount of the filing fees.

The failure to file a Notification and Report Form with the FTC and DOJ when required by the HSR Act is subject to a penalty of up to $41,484 per day of non-compliance.

_________________________

¹ As required by the 2000 amendments to Section 7A of the Clayton Act.

² All monetary values are in U.S. dollars. The FTC's guidelines for converting foreign currency can be found here: https://www.ftc.gov/enforcement/premerger-notification-program/hsr-resources/converting-foreign-currency-hsr-purposes

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2024 by Torys LLP.

All rights reserved.