02/02/2010

Corporate Finance Alert: Lower HSR Jurisdictional Thresholds Announced

On January 19, 2010, the Federal Trade Commission (the FTC) approved new lower notification thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the Act). The Act applies to acquisitions of assets or voting securities if the parties are of significant size, the transaction exceeds jurisdictional thresholds and no exception applies. The Act requires the FTC to make annual adjustments to the various thresholds to reflect changes in the gross national product. The new lower thresholds are as follows:

The "size-of-transaction" threshold will decrease from $65.2 million to $63.4 million. No notification is required under the Act if the value of voting securities and assets held as a result of the transaction is below this threshold.
The "size-of-parties" threshold in annual sales will decrease from $130.3 million to $126.9 million; and
The "size-of-parties" threshold in total assets will decrease from $13 million to $12.7 million.

Unless an exception to the Act applies, transactions valued at more than $253.7 million will be reportable under the Act regardless of the size of the parties. The lower thresholds for 2010 reflect the poor economic conditions of 2009.

If the acquiring party must file with the FTC under the Act, the applicable filing fees are as follows:

$45,000 for transactions valued at less than $126.9 million;
$125,000 for transactions valued from $126.9 million to $634.4 million; and
$280,000 for transactions valued at $634.4 million or more.

The new thresholds and applicable filing fees will be effective for transactions closing on or after 30 days after publication of the new thresholds in the Federal Register and will remain in effect until the next annual adjustment, expected in the first quarter of 2011.

For further information on this or any other Corporate Finance e-Alert, contact John Granda at 816.691.3188, Tony Strait , 816.691.3191 or Jack Bowling , 816.691.2314.