2014 HSR Thresholds

CooleyAlert
News from our Antitrust & Competition Group
Revised 2014 Hart-Scott-Rodino Antitrust Thresholds—
Effective February 24, 2014
The Federal Trade Commission has com-
As a result of this year’s adjustments,
in mind that it is the closing date—not
pleted its annual adjustments to the filing
made to reflect growth in the Gross
the date of the agreement—which gov-
thresholds under the Hart-Scott-Rodino
National Product (GNP), many transac-
erns which set of thresholds will apply.
tions valued at over $75.9 million and
Although parties are allowed to submit a
closing on or after the effective date will
filing if their transaction satisfies the cur-
trigger an HSR filing. Parties entering
rent thresholds, regardless of when their
(HSR) Act. The new, higher, thresholds
will take effect on February 24, 2014 and
apply to all transactions which close on or
transactions which would satisfy the cur-
transaction is set to close, those for whom
after this date but before the next round of
rent HSR thresholds but not trigger a filing
the new thresholds put them outside the
adjustments take effect in early 2015.
based on the adjusted figures should keep
reach of HSR have the option of simply
waiting until February 24, and then closing without a filing.
BASE HSR THRESHOLDS
2013 THRESHOLDS
2014 THRESHOLDS (effective 2/24)
$50 million “size of transaction” test
$70.9 million
$75.9 million
Notification thresholds
$10 million “size of person” test
$14.2 million
$15.2 million
The HSR Act requires parties to file notifi-
$100 million “size of person” test
$141.8 million
$151.7 million
cations with the Federal Trade Commission
$200 million “size of transaction”
test (renders size of person test
inapplicable)
$283.6 million
$303.4 million
$50 million notification threshold
$70.9 million
$75.9 million
$100 million notification threshold
$141.8 million
$151.7 million
$500 million notification threshold
$709.1 million
25 percent of stock worth $1 billion
notification threshold
50 percent (if over $50 million)
notification threshold
KEY ATTORNEY CONTACTS
Parker Erkmann
[email protected]
Washington, DC
+1 202 962 8339
$758.6 million
Francis Fryscak
[email protected]
Palo Alto
+1 650 843 5338
25 percent of stock (if worth
at least $1,418.1 million)
25 percent of stock (if worth
at least $1,517.1 million)
Jackie Grise
50 percent
(if over $70.9 million)
50 percent
(if over $75.9 million)
Washington, DC
+1 202 728 7001
Howard Morse
[email protected]
[email protected]
Washington, DC
+1 202 842 7852
Value of the acquisition is
greater than $70.9 million
but less than $141.8 million
Value of the acquisition is
greater than $75.9 million
but less than $151.7 million
Marc Schildkraut
[email protected]
Washington, DC
+1 202 728 7000
$125,000 filing fee
Value of the acquisition is at
least $141.8 million but less
than $709.1 million
Value of the acquisition is at
least $151.7 million but less
than $758.6 million
Sarah Swain
[email protected]
Washington, DC
+1 202 728 7032
$280,000 filing fee (highest HSR
filing fee tier)
Value of the acquisition
reaches or exceeds
$709.1 million
Value of the acquisition
reaches or exceeds
$758.6 million
Exemption thresholds applicable to
acquisitions of voting securities or
assets of foreign issuers; indirect
acquisitions of exempt assets
Level ties to a $70.9 million
threshold
Level ties to a $75.9 million
threshold
$45,000 filing fee is required
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This information is a general description of the law; it is not intended to
provide specific legal advice nor is it intended to create an attorney-client
relationship with Cooley LLP. Before taking any action on this information
you should seek professional counsel.
Copyright © 2014 Cooley LLP, 3000 El Camino Real, Palo Alto, CA 94306.
Permission is granted to make and redistribute, without charge, copies
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COOLEY ALE RT JAN UARY 2014
2
and Department of Justice when a pro-
Size-of-Transaction Test: met if, as a
posed transaction—such as a merger,
result of the transaction, the buyer will
joint venture, stock or asset acquisition,
acquire or hold voting securities or assets
or exclusive license—meets specified
of the seller, valued in excess of $75.9 mil-
thresholds and no exemptions apply. If
lion. In addition, if the value reaches a
a notification is required, the transaction
significantly higher level—now set at
cannot close while the statutory wait-
$303.4 million—a filing can be required even
ing period runs and the agencies review
if the size-of-person test is not satisfied.
the transaction. Most commonly, a filing
is required if the parties meet both the
“size of person” and “size of transaction”
thresholds, which will be modified by the
new thresholds to be:
Size-of-Person Test: met if one party
to the transaction has $151.7 million or
more in annual sales or total assets and
The thresholds for HSR filing fees will also
increase, though the filing fees themselves
will not change.
Failure to file an HSR Notification and
Report Form remains subject to a statutory penalty of up to $16,000 per day of
noncompliance.
the other has $15.2 million or more in
The HSR thresholds are only one part of
annual sales or total assets. If the seller
the analysis to determine whether an HSR
is not “engaged in manufacturing”, and
filing will be required, and the rules are
is not controlled by an entity that is, the
complex, so we suggest consulting with
test applied to the acquired side is annual
an HSR expert when contemplating any
sales of $151.7 million or total assets of
transaction that may be subject to HSR
$15.2 million.
notification requirements. n
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COOLEY ALE RT JAN UARY 2014