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New HSR Thresholds for 2011 to Take Effect

Insight February 25, 2011

The annual adjustment of the dollar thresholds for preacquisition filings under the Hart-Scott-Rodino Act will take effect February 24, 2011.  All transactions closing on or after the effective date will be governed by the new thresholds. 

          The annual adjustment of the dollar thresholds for preacquisition filings under the Hart-Scott-Rodino Act will take effect February 24, 2011.  All transactions closing on or after the effective date will be governed by the new thresholds. 

             Federal law requires that the Federal Trade Commission and Department of Justice be notified of mergers, acquisitions, and other transactions of a certain size prior to consummation pursuant to the Hart-Scott-Rodino Antitrust Improvements Act (HSR.)  The purpose of these HSR filings is to enable antitrust regulators to review transactions and investigate potential antitrust violations.

             The HSR notification requirements apply to transactions that satisfy the specified "size of transaction" and "size of person" thresholds.  Each year, the FTC adjusts the dollar thresholds that trigger the obligation to make HSR filings based upon changes in the gross national product.  The thresholds are increasing this year, unlike last year when the HSR thresholds decreased for the first time. 

             Pursuant to the new thresholds, parties to an acquisition or merger must, in most cases, file pre-acquisition notifications with the FTC and the Department of Justice and observe the Act's waiting periods before closing if the transaction will result in either of the following:

  •  The buyer will hold an aggregate amount of stock, non-corporate interests, and/or assets of the seller valued at more than $66.0 and the parties meet the "size of person" requirements.  The "size of person" threshold will be met if one party involved in the deal has assets or annual sales totaling $131.9 million or more and one other party involved in the deal has assets or annual sales of at least $13.2 million; or
  • Regardless of the parties' sizes, the buyer will hold an aggregate amount of stock, non-corporate interests, and/or assets of the seller valued at more than $263.8 million.

 The new thresholds will remain in effect until the next annual adjustment, expected in the first quarter of 2012.

             Filing fee thresholds have also been adjusted as follows:  $45,000 for transactions valued at less than $131.9 million; $125,000 for transactions valued between $131.9 million and $659.5 million; and $280,000 for transactions valued at $659.5 million or more.

           Certain exemptions may apply depending on the nature of the transaction and the nature and location of the assets and entities involved.  Therefore, additional analysis is often required before making a final determination regarding the necessity of an HSR filing.  For more information, please contact a member of the firm's Mergers & Acquisitions law group at http://www.rimonlaw.com/practice/mergers-acquisitions.