2007 Increases to Hart-Scott-Rodino Thresholds
January 23, 2007
The Federal Trade Commission (the “FTC”) recently published revisions to the Hart-Scott-Rodino Antitrust Improvements Act (“HSR Act”) thresholds that will become effective on February 21, 2007. Under the HSR Act, when deals meet the “size of person” and “size of transaction” thresholds, and no exemption from reporting is available, the deal must be reported to the FTC and the U.S. Department of Justice before being finalized.
Size of Person. The size of person threshold will be met if one party in the deal has assets or annual sales totaling $119.6 million and one other party involved in the deal has assets or annual sales of at least $12 million. This threshold does not apply if the size of transaction is valued at $239.2 million or more.
Size of Transaction. The size of transaction threshold will be met if the buyer will hold an aggregate amount of stock and/or assets of the seller valued at $59.8 million or more as a result of the deal. When both the size of person and the size of transaction thresholds are met, HSR filings are required unless an HSR Act regulation exempts the deal from reporting requirements.
The notification thresholds applicable to voting security purchases by minority owners will also increase:
February 1, 2001 Threshold (Original) | Current Threshold as of February 17, 2006 | New Threshold as of February 21, 2007 |
$50 million | $56.7 million | $59.8 million |
$100 million | $113.4 million | $119.6 million |
$500 million | $567.0 million | $597.9 million |
25% if worth more than $1 billion | 25% if worth more than $1.124 billion | 25% if worth more than $1.1958 billion |
50% if worth more than $50 million | 50% if worth more than $56.7 million | 50% if worth more than $59.8 million |
In addition, the thresholds applicable to many exemptions, including those governing foreign acquisitions, will increase. The $500 million threshold applicable to acquisitions of carbon-based mineral reserves, however, will remain the same.