HSR notification thresholds
Under the HSR Act, certain acquisitions of assets, voting securities, or interests in noncorporate entities (such as partnerships or limited liability companies) are subject to preclosing filing (with the U.S. antitrust agencies) and waiting period requirements if the applicable jurisdictional thresholds are satisfied and no exemption applies.
Each year the FTC adjusts the HSR jurisdictional threshold tests based on changes to the U.S. gross national product. The threshold changes do not affect the amount of the applicable HSR filing fees to be paid, but do affect the threshold levels applicable to each of the filing fee levels.
The principal changes to the HSR jurisdictional thresholds will be as follows:
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Current threshold
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New threshold effective March 4, 2021
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Size-of-transaction threshold test
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Notification may be required if acquiring person will acquire and hold certain assets, voting securities, or interests in noncorporate entities valued at more than US$94 million.
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US$92 million
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Size-of-person threshold test
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Generally, one "person" to the transaction must have at least US$188 million in total assets or annual net sales, and the other must have at least US$18.8 million in total assets or annual net sales.
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At least US$184 million and US$18.4 million in total assets or annual net sales.
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Transactions valued at more than US$376 million are not subject to the size-of-person threshold test and are therefore reportable unless exempt.
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US$368 million
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Filing fee threshold levels
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HSR filing fee of US$45,000 for transactions where the acquiring person will hold an aggregate total amount of assets, voting securities, or controlling non-corporate interests valued at more than US$94 million but less than US$188 million.
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More than US$92 million but less than US$184 million.
HSR filing fees remain unchanged.
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HSR filing fee of US$125,000 for transactions where the acquiring person will hold an aggregate total amount of assets, voting securities, or controlling noncorporate interests valued at US$188 million or more but less than US$940.1 million.
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US$184 million or more but less than US$919.9 million.
HSR filing fee remains unchanged.
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HSR filing fee of US$280,000 for transactions where the acquiring person will hold an aggregate total amount of assets, voting securities, or controlling noncorporate interests valued at US$940.1 million or more.
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US$919.9 million or more.
HSR filing fee remains unchanged.
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Notification thresholds
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When completing an HSR filing, the acquiring person in a voting securities acquisition must indicate which notification threshold it will cross –US$94 million, US$188 million, US$940.1 million, 25 percent (if the value of the voting securities to be held is greater than US$1,880.2 million), or 50 percent. These notification thresholds are also relevant to a certain HSR exemption.
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The new notification thresholds are US$92 million, US$184 million, US$919.9 million, 25 percent (if the value of the voting securities to be held is greater than US$1,839.8 million), or 50 percent.
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Interlocking directorates threshold
Section 8 of the Clayton Act prohibits a person from serving as a director or officer of two competing corporations if certain thresholds are satisfied and no exemption applies. The FTC is required to adjust annually certain thresholds related to Section 8 based on changes to the gross national product.
Under the new threshold, which became effective 21 January 2021 upon publication in the Federal Register, a person may not serve as a director or officer of competing corporations if each corporation has capital, surplus, and undivided profits aggregating more than US$37,382,000, unless one of the corporations has competitive sales of less than US$3,738,200. Previously, a person was prohibited from serving as a director or officer of competing corporations if each corporation had capital, surplus, and undivided profits aggregating more than US$38,204,000 unless one of the corporations had competitive sales of less than US$3,820,400.
Authored by Michele Harrington and Robert Baldwin
