FTC Issues Its Annual Revisions to HSR and Interlocking Directorate

By: Jay L. Levine (Porter Wright)

In this blog post, author Jay L. Levine (Porter Wright) tackles the Federal Trade Commission’s (FTC) recent announcement regarding annual updates to the notification thresholds for Hart-Scott-Rodino Antitrust Improvements Act (HSR) filings and other key values under HSR regulations. These new thresholds will take effect in late February, 30 days after their publication in the Federal Register.

As a refresher, the HSR Act mandates that certain acquisitions of voting securities or assets exceeding specific thresholds must be reported to U.S. antitrust authorities for pre-transaction review. The “size-of-transaction threshold” requires transactions to surpass a set value, while under certain conditions, the parties involved must also meet “size-of-person thresholds.” These thresholds, which are adjusted annually based on changes in the gross national product (GNP), will increase from 2024 levels, reflecting economic growth over the past year. Additionally, the FTC has updated the safe harbor thresholds governing interlocking directorates between competing companies.

HSR Revisions

The most notable change is an increase in the minimum size-of-transaction threshold from $119.5 million to $126.4 million. The size-of-person thresholds will also rise as follows:

• For transactions valued between $126.4 million and $505.8 million, one party must have at least $25.3 million in sales or assets, while the other must have at least $252.9 million, based on their most recent balance sheet or income statement.
• For transactions exceeding $505.8 million, no size-of-person threshold applies, meaning an HSR filing is automatically required.

Additionally, filing fees and their associated thresholds have been significantly revised. The previous three-tier fee structure has now been expanded to a six-tier system, introducing higher fees across various transaction levels…

CONTINUE READING…