Alert February 19, 2019

FTC Announces New Thresholds For 2019

Summary

As required by the HSR Act, on February 15, 2019, the FTC released its annual adjustments to the reporting thresholds. The key number to remember is now $90 million. Generally, transactions valued at $90 million or more must be reported and cleared by the federal antitrust authorities before the transaction may close. The adjustments will become effective on April 3, 2019. The revised thresholds will apply to all transactions that close on or after the effective date.

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 February 15, 2019, the FTC announced the revised thresholds. Below are the current and new thresholds:

Test 2018 Threshold **NEW**
Adjusted 2019 Threshold
Size-of-Transaction $84.4 million $90 million
Size-of-Person as Measured by Annual Net Sales or Total Assets $16.9 million for one party

AND

$168.8 million for the other party
$18 million for one party

AND

$180 million for the other party
Size-of-Transaction Threshold
at Which Size-of-Person Test
No Longer Applies
$337.6 million $359.9 million

 

The practical effect of this change is that transactions valued in excess of $90 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 $180 million or more and the other party has annual net sales or total assets of $18 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 $36,564,000, and (2) each corporation’s competitive sales are at least $3,656,400.

The current premerger filing fee schedule is:

  • $45,000 for transactions valued at $90 million or more, but less than $180 million
  • $125,000 for transactions valued at $180 million or more, but less than $899.8 million
  • $280,000 for transactions valued at $899.8 million or more

Please contact Andrea Agathoklis Murino, Paul Jin, Kirby Lewis, Todd Hahn, Matt Wheatley or Brian Desmarais if you have any questions.