So far, winter hasn’t been too bad here in Northeast Ohio, although I don’t think anyone is predicting that the buzzards will make an early return to Hinckley. Still, the groundhog may have been on to something, because here at DealLawyers.com, we are welcoming our own harbinger of spring – the annual inundation of law firm memos about the new HSR filing thresholds – a few weeks earlier than we did last year.
I think the government shutdown had more to do with the timing of last year’s announcement than the weather, but in any event this year’s winner of the annual “first in my inbox” contest was Akin Gump. Here’s an excerpt from their memo with the details on the new thresholds:
The Size-of-Transaction Threshold – The minimum transaction size test has increased from $90 million to $94 million (an approximate 4.4 percent increase). Thus, under the revised thresholds, HSR Act lings will be required (unless otherwise exempted) for a transaction that results in the acquiring person holding more than $94 million of the acquired person’s voting securities, noncorporate interests or assets (assuming the size-of-person thresholds are also met).
The Size-of-Person Thresholds – The size-of-person thresholds have increased by a similar percentage. While the HSR Act size-of-person rules are complex, under the new thresholds an HSR Act ling is generally not required for transactions valued at more than $94 million but less than $376 million, unless one party to the transaction has $188 million in annual net sales or total assets and the other party has $18.8 million in annual net sales or total assets. Any transaction that is valued at more than $376 million will be reportable under the HSR Act (unless otherwise exempted) without application of the size-of-person test. In other words, the potential exemption afforded by the size-of-person test will be inapplicable to transactions valued at more than $376 million.
The memo also details changes to the HSR filing fees, and notes that the FTC also revised the standards applicable to the interlocking directorate thresholds under Section 8 of the Clayton Act, which prohibits an individual from serving as an officer or director of two competing corporations, with certain exceptions, provided the corporations meet certain thresholds. The new thresholds, which became effective January 21, 2020, are now $38,204,000 for Section 8(a)(1) and $3,820,400 for Section 8(a)(2)(A).
-John Jenkins, DealLawyers.com February 4, 2020
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