2014 Hart-Scott-Rodino Requirements

What you need to know:

HSR filing thresholds will be adjusted upward effective February 24, 2014.

What you need to do:

Parties involved in a large merger or acquisition should analyze whether it will exceed the new thresholds.

The Hart-Scott-Rodino Act dollar thresholds are adjusted each year.  The next set of adjustments will take effect on February 24, 2014.  These adjustments may affect whether a company is required to make a premerger notification filing in any given transaction.

By way of background, the HSR Act is designed to provide notice to the federal antitrust enforcement agencies (the Federal Trade Commission and the US Department of Justice Antitrust Division) in advance of large mergers and acquisitions.  Where the HSR Act applies, the parties to such a transaction must submit a detailed form, along with copies of certain internal documents and consultant documents, and they must pay a large filing fee ($45,000, $125,000 or $280,000, depending on the size of the transaction).  When Congress passed the HSR Act in 1976, Congress set dollar thresholds for its application, and those dollar amounts stayed frozen for 24 years.  Congress then reformed the HSR law in 2000 by increasing the thresholds and by providing that they will be adjusted for changes in the US gross national product.

Adjusted Filing Thresholds as of 2014

HSR filing thresholds will be higher in 2014 than in 2013.  Some transactions that would have required an HSR filing last year will not require a filing if they close on or after February 24, 2014.  Below is a short reference:

2000 Threshold	2013 Threshold	Revised 2014 Threshold
$10 million	$14.2 million	$15.2 million
$50 million	$70.9 million	$75.9 million
$100 million	$141.8 million	$151.7 million
$200 million	$283.6 million	$303.4 million

By way of brief review, and after giving effect to the 2014 adjustments to the thresholds, in most instances the parties to a transaction must make an HSR filing if:

• One party has a size of at least $151.7 million (measured by sales or assets);
• The other party has a size of at least $15.2 million (measured by sales or assets if engaged in manufacturing; by assets, usually, if not engaged in manufacturing); and
• The size of the transaction is at least $75.9 million.

In addition, regardless of the size of the parties, an HSR filing will be required if the size of the transaction is at least $303.4 million.  These figures will be adjusted for changes to the US gross national product again next year.

HSR analysis sometimes involves nuances and detailed rules.  The parties should consult counsel early in the planning of any transaction that has the potential to cross these thresholds.