The Federal Trade Commission (FTC) has released the annual updated thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). Originally enacted by President Gerald Ford, the HSR Act requires parties to notify the FTC when they are planning to execute large mergers and acquisitions. This notification allows the FTC time to review the proposed action and determine whether it will violate any antitrust laws.
Not all mergers and acquisitions, however, must be pre-reported to government regulators. Whether a business transaction requires a “Premerger Notification” or not depends on the size of the acquired/acquiring party, as well as the size of the transaction itself.
The thresholds determining which transactions qualify as reportable are updated annually to account for changes in the U.S. gross national product.
According to the new 2020 parameters, if both of the following criteria are met, the transaction must be reported:
- Size-of-Transaction: the transaction is greater than $94 million (i.e., voting securities and assets acquired through the transaction exceed $94 million)
- Size-of-Person: one of the involved parties is valued above $188 million (in total assets or annual net sales) and the other is valued above at least $18.8 million
It’s also important to note that if the size of the transaction exceeds $376 million, then the transaction must be reported regardless of whether the size-of-person threshold is met or not.
Revised 2020 Threshold
$18.8 million and $188 million
$18 million and $180 million
Chart from https://www.jdsupra.com/legalnews/hart-scott-rodino-act-filing-thresholds-89426/
If you have any further questions regarding HSR thresholds and compliance in reporting mergers and acquisitions, please contact Charles B. Hughes.