On January 24, 2012 the Federal Trade Commission ("FTC") announced revised thresholds that determine whether companies are required to notify federal antitrust authorities about a transaction under the Hart-Scott-Rodino Antitrust Improvements Act ("HSR") and for the jurisdictional thresholds that trigger the prohibition on interlocking directorates.
New HSR Thresholds
Premerger notification must be filed if – among other things – the value of a transaction exceeds the filing thresholds, which are revised annually, based on the change in gross national product. For 2012, the threshold for reporting proposed mergers and acquisitions subject to enforcement under Section 7A of the Clayton Act increased from $66.0 million to $68.2 million.
If the value of the securities and assets held as a result of the transaction is between $68.2 million and $272.8 million, the transaction must be reported in most cases if either the acquired or acquiring person has annual net sales or total assets of at least $13.6 million and the other party to the transaction has at least $136.4 million in annual net sales or total assets. If the value of the securities or assets exceeds $272.8 million, then the parties must report the transaction notwithstanding the size of the parties.
New Interlocking Directorates Thresholds.
Section 8 of the Clayton Act prohibits the same person from serving as an officer or director of competing corporations if certain thresholds are met. The new thresholds for the Act's prohibition on interlocking directorates are $27,784,000 for Section 8(a)(1) and $2,778,400 for Section 8(a)(2)(A).
The revised thresholds will apply to all transactions that close on or after the effective date of the FTC's notice, which is 30 days after its publication in the Federal Register. The interlocking directorates threshold revisions will be effective upon publication in the Federal Register.
Kelley Drye & Warren LLP
Kelley Drye is recognized as a premier antitrust and competition firm. Our national reputation stems from our proven track record of successfully representing clients in complex competition issues arising under federal and state antitrust laws. Our professionals include officials from the ABA Antitrust Section, and former officials of the United States Department of Justice Antitrust Division and the FTC. Our firm is also supported by Georgetown Economic Services, an economic consulting firm.
For more information about this client advisory, please contact:
William C. MacLeod