The Federal Trade Commission’s annual revisions to the dollar thresholds under the Hart-Scott-Rodino Antitrust Improvements Act (the “HSR Act”) became effective on February 24, 2011. The revisions, which are based on the change in the gross national product, increased the dollar thresholds necessary to trigger the reporting requirements under the HSR Act for certain mergers, acquisitions, and joint ventures.
Companies proposing transactions that meet certain criteria set out by the HSR Act must notify both the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice and wait for agency approval before proceeding with the transaction. Transactions closing on or after February 24, 2011 must be reported if the transaction meets the following revised criteria:
- “Size of Transaction” – the transaction is reportable if (1) the transaction is valued in excess of $263.8 million (up from $253.7 million), or (2) the transaction is valued between $66 million (up from $63.4 million) and $263.8 million and the “size of person” test is also met.
- “Size of Person” – means that one party (together with affiliates under common control) has total assets or annual net sales of least $131.9 million (up from $126.9 million) and the other party (together with affiliates under common control) has total assets or annual net sales of at least $13.2 million (up from $12.7 million).
The Federal Trade Commission also increased the thresholds triggering the prohibition against interlocking directorates under Section 8 of the Clayton Act. Section 8 prohibits one individual from serving as a director or officer of two competing corporations. Under the revised thresholds, competitor corporations are subject to the prohibition if each has capital, surplus, and undivided profits aggregating more than $26,867,000 (up from $25,841,000), with the exception that no corporation is covered if the competitive sales of either corporation are less than $2,686,700 (up from $2,584,100). These revisions became effective on January 25, 2011.
If you have any questions or concerns regarding the HSR Act or any other merger and acquisition matter, please contact Daniel Nunn in the Jacksonville office (904) 598-3100, Olga Pina in the Tampa office (813) 228-7411, or Arnold Zipper in the Fort Lauderdale office (954) 703-3900 of Fowler White Boggs PA.
