Alert January 21, 2016

FTC Announces New Thresholds for 2016

Summary

As required by the HSR Act, on January 21, 2016, the FTC released its annual adjustments to the reporting thresholds. The key number to remember is now $78.2 million. Generally, transactions valued above $78.2 million must be reported and cleared by the federal antitrust authorities before the transaction may close. The adjustments will become effective 30 days after imminent publication in the Federal Register. The anticipated effective date is therefore on or about February 22, 2016.

Each year, the Federal Trade Commission (“FTC”) adjusts the reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) based on changes in gross national product. On January 21, 2016, the FTC announced the revised thresholds. Below are the current and new thresholds: 

Test 2015
Threshold
 **NEW**
Adjusted 2016 Threshold
 

Size-of-Transaction  

 

$76.3 million  

$78.2 million 
Size-of-Person as Measured by Annual Net Sales or Total Assets  $15.3 million for one party
AND
$152.5 million for the other party 
$15.6 million for one party
AND
$156.3 million for the other party
Size-of-Transaction Threshold at Which Size-of-Person Test No Longer Applies $305.1 million  $312.6 million

The practical effect of this change is that transactions valued in excess of $78.2 million will be subject to the reporting and waiting requirements of the HSR Act. In general, the size-of-parties test will be satisfied only if one party to the transaction has annual net sales or total assets of $156.3 million or more and the other party has annual net sales or total assets of $15.6 million or more.

The interlocking directorate thresholds under Section 8 of the Clayton Act have also been adjusted to account for changes in the gross national product. Section 8 may preclude a person from serving as an officer or director of two competing corporations when (1) each of the competing corporations has capital, surplus, and undivided profits aggregating more than $31,841,000, and (2) each corporation’s competitive sales are at least $3,184,100.

The current premerger filing fee schedule is:

  • $45,000 for transactions valued in excess of $78.2 million but less than $156.3 million
  • $125,000 for transactions valued at $156.3 million or greater but less than $781.5 million
  • $280,000 for transactions valued at $781.5 million or more