Natalia Chi
Increased HSR thresholds. In general, a transaction will not be reportable under the new thresholds unless it is valued for HSR purposes at more than $111.4 million. If the value of the proposed transaction is greater than $111.4 million but does not exceed $445.5 million, the transaction will not be reportable unless the acquirer’s “ultimate parents” and acquirees also meet a certain minimum “staff size” test: In most cases, where one parent (including all entities it controls) has net sales or total assets of at least $22.3 million, and the other has net sales or total assets totals of at least $222.7 million. If the jurisdictional criteria are met, transactions are reportable unless an exemption applies. The table below shows the original and updated data for each relevant HSR threshold (the original data continues to appear in the HSR regulations with the wording “as adjusted” to remind the reader that the thresholds are adjusted every year). The parties should be aware that there are many other factors that affect whether a given transaction is subject to jurisdictional thresholds in addition to these dollar thresholds.
HSR deposit fees. Deposit fees for transactions to be reported, which were recently updated under the merger filing fees modernization lawwill be the following:
HSR violations. Effective January 6, 2023, the maximum civil penalty for HSR Act violations increased from $46,517 to $50,120 per day. The new maximum civil penalty per day applies only to penalties assessed after the effective date, including those whose associated violation is prior to January 10, 2022. The maximum civil penalty is not affected by adjustments to the HSR filing thresholds.
Revised thresholds for interconnected directions. Section 8 of the Clayton Act generally prohibits companies that compete with each other from having interconnected members on their corporate boards of directors. The FTC annually reviews the jurisdictional threshold that triggers the prohibition of interlocking directorates. The annual revisions of the threshold are based on the change in gross national product and have been in force since 20 January 2023.
- Section 8(a)(1) of the Clayton Act prohibits a person from serving as a director or officer elected or appointed by the board of directors of two or more companies if the combined capital, surplus and undivided profits of each of the companies exceed $45,257,000.
- Section 8(a)(2)(A) of the Clayton Act exempts interlocks for which either company’s competitive sales are less than $4,525,700.
- Note that the statutory exemptions in Sections 8(a)(2)(B) and (C), which exempt interlocks when (i) either company’s competitive sales are less than 2% of that company’s total sales company or (ii) each company’s competitive sales are less than 4% of that company’s total sales, remain unchanged, and are not reviewed on an annual basis.
