Antitrust Update: Federal Trade Commission Announces Revised Reporting Thresholds for Hart-Scott-Rodino Filings


by Dave Roe and Tom Worthington

Roe, David Worthington, Thomas
droe@mcgrathnorth.com
tworthington@mcgrathnorth.com
(402) 341-3070

Earlier this week the Federal Trade Commission announced the annual adjustment to the dollar thresholds for pre-acquisition filings required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “Act”).  The revised thresholds will become effective on February 24, 2011, and all transactions closing on or after February 24, 2011 will be subject to the revised thresholds.

Since 2000 the applicable thresholds for the Act have been adjusted annually based on changes in the gross national product. In 2010 the thresholds decreased for the first time.  However, as expected, the revised thresholds announced earlier this week have once again increased for 2011.

Pursuant to the Act, parties to certain merger or acquisition transactions are generally required to submit pre-acquisition filings to the Federal Trade Commission and the Department of Justice, and are further required to comply with the Act’s applicable waiting periods (typically 30 days), prior to consummating the transaction if:

1. As a result of the contemplated transaction, the ultimate parent entity of the acquiring person (the “Acquirer”) will hold more than $263.8 million (increased from $253.7 million in 2010) worth of assets or voting securities of the acquired party (the “Target”); or
2. As a result of the contemplated transaction, the Acquirer will: (a) hold more than $66.0 million (increased from $63.4 million in 2010) worth of assets or voting securities of the Target; and (b) the “Size-of-Person” test, as detailed below, is satisfied.
The “Size-of-Person” test is generally satisfied if: (a) the Acquirer has total assets or annual net sales equal to or greater than $131.9 million (increased from $126.9 million in 2010), and the Target has annual total assets or annual net sales equal to or greater than $13.2 million (increased from $12.7 million in 2010)1 ; or (b)  the Acquirer has total assets or annual net sales equal to or greater than $13.2 million, and the Target has annual net sales or total assets equal to or greater than $131.9 million.

Also effective February 24, 2011, the dollar thresholds for determining the applicable filing fee will be as set forth below.

Value of Assets / Voting Securities Acquired

Filing Fee

$66.0 million to less than $131.9 million

$45,000

$131.9 million to less than $659.5 million $125,000

Greater than $659.5 million

$280,000

Please note that numerous exemptions and aggregation calculations may apply when determining: (a) whether a pre-acquisition filing is required; and (b) the correct filing fee for the underlying transaction.  Therefore, parties to a transaction should seek the guidance of qualified legal counsel to assist with such an analysis.

For additional information, please contact David H. Roe  or Thomas M. Worthington.

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