1. Lower Thresholds For HSR Filings

On February 1st, 2021, the Federal Trade Commission announced revised, lower thresholds for premerger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The filing thresholds are revised annually, based on the change in Gross National Product (GNP) and had not been lowered since 2010.

The new thresholds will become effective on March 4, 2021. Acquisitions that close on or after the effective date will be subject to the new thresholds.

The HSR Act notification requirements apply to transactions that satisfy the specified “size of transaction” and “size of person” thresholds. The key adjusted thresholds are summarized in the following chart:

Size of Transaction Test Notification is required if
  • the acquiring person will hold certain assets, voting securities, and/or interests in non-corporate entities valued at more than $92 million AND the parties meet the Size of Person test; OR
  • the acquiring person will hold certain assets, voting securities, and/or interests in non-corporate entities valued at more than $368 million – such transactions are not subject to the Size of Person test.
Size of Person Test Generally, one “person” to the transaction must have at least $184 million in total assets or annual net sales, and the other must have at least $18.4 million in total assets or annual net sales.

The above rules are general guidelines only and their application may vary depending on the particular transaction.While the filing thresholds have changed, the filing fees have not, and will be based on the new thresholds as follows: $45,000 for transactions valued at more than $92 million but less than $184 million; $125,000 for transactions valued at more than $184 million but less than $919.9 million; and $280,000 for transactions valued at more than $919.9 million.

  1. Lower Thresholds For the Prohibition Against Interlocking Directorates

Lower thresholds for the prohibition in Section 8 of the Clayton Act against interlocking directorates became effective on January 21, 2021. Section 8 prohibits, with certain exceptions, one person from serving as a director or officer of two competing corporations if two thresholds are met. Applying the new thresholds, competitor corporations are covered by Section 8 if each one has capital, surplus and undivided profits aggregating to more than $37,382,000, with the exception that the interlock is not prohibited if the competitive sales of either corporation are less than $3,738,200.