The Federal Trade Commission (FTC) today announced decreased reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act).
These reporting thresholds are revised annually based on changes in the US gross national product. Due to a contraction in the US economy, the HSR thresholds were revised downwards for only the second time since the thresholds were first tied to GNP. The decreases will apply to all transactions that close after the effective date, which is March 4, 2021 (30 days after publication of the changes in the Federal Register).
Most importantly, the minimum "size-of-transaction" threshold will be lowered from US$94 million to US$92 million. Acquisitions below this threshold will not be reportable.
|2021 Adjusted Threshold
|US$18.4 million and US$184 million
|Size-of-Transaction above which Size-of-Persons Test Does Not Apply
The adjustments also apply to certain other HSR Act thresholds and exemptions, such as the exemptions for acquisitions of foreign assets and voting securities.
While the HSR filing fee amounts have not changed in more than a decade, the size-of-transaction thresholds, upon which the filing fee is based, will be decreased. The filing fee for each of the new thresholds will be:
|2021 Size-of-Transaction Threshold
|Value of transaction greater than US$92 million, but less than US$184 million
|Value of transaction US$184 million or greater, but less than US$919.9 million
|Value of transaction US$919.9 million or greater
|25 percent of an issuer's voting securities if valued in excess of US$1,839.8 million
|50 percent of an issuer's voting securities if valued at greater than US$92 million
Even if a transaction is reportable based on the above thresholds, it may qualify for an HSR Act exemption. Complex rules apply to the valuation and exemptions under the HSR Act, and you should consult a lawyer experienced in HSR matters to determine whether a transaction is reportable.
The new thresholds will remain in effect until the next annual adjustment, expected in January or February 2022.
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