The Federal Trade Commission's ("FTC") annual revisions to the dollar jurisdictional thresholds in the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), will become effective on February 11, 2013. These changes increase the dollar thresholds necessary to trigger the HSR Act's premerger notification reporting requirements. The FTC also increased the thresholds for interlocking directorates under Section 8 of the Clayton Act.

Revised HSR Thresholds

Under the HSR Act, parties involved in proposed mergers, acquisitions of voting securities, unincorporated interests or assets, or other business combinations (e.g., joint ventures, exclusive license deals) that meet certain thresholds must report the contemplated transactions to the FTC and the Antitrust Division of the U.S. Department of Justice ("DOJ") unless an exemption applies.

The parties to a proposed transaction that requires notification under the HSR Act cannot close the transaction until a statutorily prescribed waiting period (generally 30 days) has expired or been terminated early. Under the revised thresholds, transactions valued at $70.9 million or less are not reportable under the HSR Act.

A transaction closing on or after February 11, 2013, may be reportable if it meets the following revised criteria:

Size of Transaction Test

The acquiring person will hold, as a result of the transaction, an aggregate total amount of voting securities, unincorporated interests, or assets of the acquired person valued in excess of $283.6 million;

or

The acquiring person will hold, as a result of the transaction, an aggregate total amount of voting securities, unincorporated interests, or assets of the acquired person valued in excess of $70.9 million, and the Size of Person thresholds below are met.

Size of Person Test

Either the acquiring person or the acquired person has at least $14.2 million in total assets or annual sales, and the other person has at least $141.8 million in total assets or annual sales.

The full list of the revised thresholds is as follows:

The filing fees for reportable transactions have not changed, but the transaction value ranges to which they apply have been adjusted as follows:

operation, competitors, so that the elimination of competition by agreement between them would constitute a violation of any of the antitrust laws."1

Section 8 provides several exemptions from the prohibition on interlocks for arrangements where the competitive overlaps "are too small to have competitive significance in the vast majority of situations."2 A corporate interlock does not violate the statute if: (1) the competitive sales of either corporation are less than $2,888,300; (2) the competitive sales of either corporation are less than 2 percent of that corporation's total sales; or (3) the competitive sales of each corporation are less than 4 percent of that corporation's total sales.

The revised dollar thresholds for interlocking directorates of $28,883,000 and $2,888,300 became effective on January 14, 2013.

Footnotes

1 15 U.S.C. § 19(a)(1)(B).

2 S. REP. NO. 101-286, at 5-6 (1990), reprinted in 1990 U.S.C.C.A.N. 4100, 4103-04.

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