Background
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), requires all persons contemplating certain mergers or acquisitions that meet or exceed the jurisdictional thresholds (shown below) to file notification with the Federal Trade Commission and Department of Justice Antitrust Division and to wait a period of time before consummating the transaction.
Each fiscal year the jurisdictional filing thresholds are adjusted to reflect the percentage change in the gross national product. The new jurisdictional filing thresholds were announced January 24, 2012 and will become effective 30 days after being published in the Federal Register.
Filing Thresholds
To determine whether an HSR Act filing is needed, parties need to analyze their transactions against the Size of Transaction and Size of Person reporting thresholds, utilizing the following steps:
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Will an acquiring person hold an aggregate amount of voting securities and assets less than $68.2 million? If yes, then no HSR Act filing is needed. If no, move to Step 2.
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Will an acquiring person hold in excess of $68.2 million but not in excess of $272.8 million? If yes, then move to Step 3. If no, then move to Step 4.
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Does one person to the transaction have sales or assets of at least $13.6 million and the other person have sales or assets of at least $136.4 million? If yes, then an HSR Act filing is needed. If no, then an HSR Act filing is not needed.
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Will an acquiring person hold in excess of $272.8 million? If yes, an HSR Act filing is needed.
For purposes of this analysis, the value of any assets under consideration is the fair market value of the entity’s non-cash assets without regard to whether those assets are subject to a mortgage or how the assets might have been depreciated for accounting purposes. The table below summarizes the reporting thresholds under the HSR Act:
Filing Fee
In connection with an HSR Act filing, the acquiring person must pay a filing fee at the time of filing by electronic wire transfer. The amount of the filing fee depends upon the size of the transaction as follows:
Penalty
Any person (or officer, director or partner) who fails to notify the FTC and DOJ of a reportable transaction faces a civil penalty of $16,000 for each day of noncompliance.
Contact Information
If you have any questions or would like additional information about this topic, please contact Clifton E. Johnson at 317.977.1430
or cjohnson@wp.hallrender.com, Michael R. Greer at 317.977.1493 or mgreer@wp.hallrender.com or your regular Hall Render attorney.
