The Federal Trade Commission (“FTC”) announced that the thresholds that determine whether a transaction is subject to the premerger notification requirements of the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) would be lowered in 2010 from currently prevailing levels. Since 2005, the thresholds have been adjusted annually to reflect changes in U.S. gross domestic product. In general, the HSR Act requires that both acquirors and targets in certain merger, acquisition and similar transactions file a premerger notice with the FTC and the Anti-Trust Division of the Department of Justice if a transaction satisfies certain jurisdictional thresholds.
As modified by the FTC, at the effective date of the revision of the applicable regulation those thresholds for filing a premerger notification will be:
- One party has annual net sales or total assets of at least $126.9 million (formerly $130.3 million);
- The other party has annual net sales or total assets of at least $12.7 million (formerly $13.0 million);
- As a result of the transaction, the acquiring party will hold an aggregate amount of voting securities and assets of the acquired party valued at more than $63.4 million (formerly $65.2 million) OR (even if 1, 2 and 3 are not met);
- As a result of the transaction, the acquiring party will hold an aggregate amount of voting securities and assets of the acquired party valued at more than $253.7 million (formerly $260.7 million), regardless of the sales or assets of the acquiring and acquired party.
Transactions and parts of transactions that may not be consummated unless approved by a federal banking regulator are exempt from HSR Act premerger notification requirements. The adjusted thresholds will apply to any covered transaction closed on or after February 22, 2010.