Description
January 2016
Alert
Antitrust/Competition
HSR Act Filing
Threshold
Revisions
By John Sipple, Vadim Brusser,
Alexis Brown-Reilly and
Jonathan Cheng
On January 21, 2016, the U.S. Federal Trade Commission (FTC) announced
revisions to the jurisdictional thresholds for the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (HSR Act), which will become effective 30 days after
publication in the Federal Register and apply to transactions consummated
on or after the effective date. The HSR Act requires the FTC to revise the
thresholds annually based on changes in the gross national product.
Under the revisions, the size of transaction threshold has been increased from
$76.3 million to $78.2 million. Consequently, the HSR Act notification and
waiting requirements will now apply to acquisitions resulting in the acquiring
person holding assets and/or voting securities of the acquired person valued in
excess of $78.2 million.
The HSR Act requirements also will apply to purchases of partnership interests and membership interests of a limited liability company provided that (i) the acquiring person obtains control and (ii) the interests held by the acquiring person are valued in excess of $78.2 million. Acquisitions that do not exceed $312.6 million in value (previously $305.1 million) also have to meet the size of person threshold to trigger the HSR Act requirements. Under the revisions, the size of person threshold generally will be met if one of the parties has total assets or annual net sales of $156.3 million or more (previously $152.5 million) and the other party has total assets or annual net sales of $15.6 million or more (previously $15.3 million). In addition, acquisitions that result in the ownership of less than 50 percent of the outstanding voting securities of a corporation require HSR notification when certain dollar thresholds are reached. Under the revisions, a premerger filing is now required for such acquisitions when the value of the total voting securities acquired and held reaches each of the following dollar thresholds: (a) $78.2 million, (b) $156.3 million, (c) $781.5 million and/or (d) 25 percent of an issuer’s outstanding voting securities if valued in excess of $1.563 billion. Weil, Gotshal & Manges LLP .
Antitrust/Competition Summary of threshold changes: Original threshold 2016 Adjusted threshold $10 million $15.6 million $50 million $78.2 million $100 million $156.3 million $200 million $312.6 million $500 million $781.5 million $1 billion $1.563 billion The HSR Act filing fee thresholds also have been revised as shown in the following chart. Transaction valued at: HSR Act Filing Fee More than $78.2 million but less than $156.3 million $45,000 $156.3 million or more but less than $781.5 million $125,000 $781.5 million or more Revisions in Thresholds for Section 8 of the Clayton Act The FTC also has revised the thresholds for interlocking directorates prohibited by Section 8 of the Clayton Act. The FTC is required to revise the Section 8 thresholds annually based on changes in the gross national product. Section 8 of the Clayton Act prohibits, with certain exceptions, one person serving as a director or officer of two competing corporations if certain thresholds are met. As revised, Section 8 now covers situations where each corporation has capital, surplus, and undivided profits aggregating $31,841,000 or more, unless either corporation has competitive sales of less than $3,184,100. $280,000 Further information regarding these revisions to the HSR Act and Section 8 of the Clayton Act are available on the FTC website at: https://www.ftc.gov/ news-events/press-releases/2016/01/ftc-announcesnew-clayton-act-monetary-thresholds-2016. If you have questions concerning the contents of this Alert, or would like more information about Weil’s Antitrust/Competition practice group, please speak to your regular contact at Weil, or to: John Sipple (Washington DC) Bio Page john.sipple@weil.com +1 202 682 7082 Vadim Brusser (Washington DC) Bio Page vadim.brusser@weil.com +1 202 682 7224 Alexis Brown-Reilly (Washington DC) Bio Page alexis.brown-reilly@weil.com +1 202 682 7084 Jonathan Cheng (Washington DC) Bio Page jonathan.cheng@weil.com +1 202 682 7248 © 2016 Weil, Gotshal & Manges LLP. All rights reserved.
Quotation with attribution is permitted. This publication provides general information and should not be used or taken as legal advice for specific situations that depend on the evaluation of precise factual circumstances. The views expressed in these articles reflect those of the authors and not necessarily the views of Weil, Gotshal & Manges LLP.
If you would like to add a colleague to our mailing list, please click here. If you need to change or remove your name from our mailing list, send an email to weil.alerts@weil.com. Weil, Gotshal & Manges LLP January 2016 2 .
The HSR Act requirements also will apply to purchases of partnership interests and membership interests of a limited liability company provided that (i) the acquiring person obtains control and (ii) the interests held by the acquiring person are valued in excess of $78.2 million. Acquisitions that do not exceed $312.6 million in value (previously $305.1 million) also have to meet the size of person threshold to trigger the HSR Act requirements. Under the revisions, the size of person threshold generally will be met if one of the parties has total assets or annual net sales of $156.3 million or more (previously $152.5 million) and the other party has total assets or annual net sales of $15.6 million or more (previously $15.3 million). In addition, acquisitions that result in the ownership of less than 50 percent of the outstanding voting securities of a corporation require HSR notification when certain dollar thresholds are reached. Under the revisions, a premerger filing is now required for such acquisitions when the value of the total voting securities acquired and held reaches each of the following dollar thresholds: (a) $78.2 million, (b) $156.3 million, (c) $781.5 million and/or (d) 25 percent of an issuer’s outstanding voting securities if valued in excess of $1.563 billion. Weil, Gotshal & Manges LLP .
Antitrust/Competition Summary of threshold changes: Original threshold 2016 Adjusted threshold $10 million $15.6 million $50 million $78.2 million $100 million $156.3 million $200 million $312.6 million $500 million $781.5 million $1 billion $1.563 billion The HSR Act filing fee thresholds also have been revised as shown in the following chart. Transaction valued at: HSR Act Filing Fee More than $78.2 million but less than $156.3 million $45,000 $156.3 million or more but less than $781.5 million $125,000 $781.5 million or more Revisions in Thresholds for Section 8 of the Clayton Act The FTC also has revised the thresholds for interlocking directorates prohibited by Section 8 of the Clayton Act. The FTC is required to revise the Section 8 thresholds annually based on changes in the gross national product. Section 8 of the Clayton Act prohibits, with certain exceptions, one person serving as a director or officer of two competing corporations if certain thresholds are met. As revised, Section 8 now covers situations where each corporation has capital, surplus, and undivided profits aggregating $31,841,000 or more, unless either corporation has competitive sales of less than $3,184,100. $280,000 Further information regarding these revisions to the HSR Act and Section 8 of the Clayton Act are available on the FTC website at: https://www.ftc.gov/ news-events/press-releases/2016/01/ftc-announcesnew-clayton-act-monetary-thresholds-2016. If you have questions concerning the contents of this Alert, or would like more information about Weil’s Antitrust/Competition practice group, please speak to your regular contact at Weil, or to: John Sipple (Washington DC) Bio Page john.sipple@weil.com +1 202 682 7082 Vadim Brusser (Washington DC) Bio Page vadim.brusser@weil.com +1 202 682 7224 Alexis Brown-Reilly (Washington DC) Bio Page alexis.brown-reilly@weil.com +1 202 682 7084 Jonathan Cheng (Washington DC) Bio Page jonathan.cheng@weil.com +1 202 682 7248 © 2016 Weil, Gotshal & Manges LLP. All rights reserved.
Quotation with attribution is permitted. This publication provides general information and should not be used or taken as legal advice for specific situations that depend on the evaluation of precise factual circumstances. The views expressed in these articles reflect those of the authors and not necessarily the views of Weil, Gotshal & Manges LLP.
If you would like to add a colleague to our mailing list, please click here. If you need to change or remove your name from our mailing list, send an email to weil.alerts@weil.com. Weil, Gotshal & Manges LLP January 2016 2 .
