On January 24, 2012, the Federal Trade Commission announced
revised, higher thresholds for premerger filings
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The
filing thresholds are revised annually, based on the change in
gross national product and will be effective thirty days after
publication in the Federal Register. Publication is expected within
a week, so the new thresholds will most likely become effective in
late February 2012. Acquisitions that have not closed by the
effective date will be subject to the new thresholds.
The HSR Act notification requirements apply to transactions that
satisfy the specified "size of transaction" and
"size of person" thresholds. The key adjusted thresholds
are summarized in the following chart:
Size of Transaction Test
Notification is required if the acquiring person will acquire
and hold certain assets, voting securities, and/or interests in
non-corporate entities valued at more than $68.2 million.
Size of Person Test
(Transactions valued at more than $272.8 million are not subject
to the Size of Person Test and are therefore reportable)
Generally one "person" to the transaction must have at
least $136.4 million in total assets or annual net sales, and the
other must have at least $13.6 million in total assets or annual
While the filing thresholds have changed, the filing fees have not,
but will be based on the new thresholds as follows: $45,000 for
transactions valued at more than $68.2 million but less than $136.4
million; $125,000 for transactions valued at more than $136.4
million but less than $682.1 million; and $280,000 for transactions
valued at more than $682.1 million.
The above rules are general guidelines only and their
application may vary depending on the particular transaction.
2. Higher Thresholds For the Prohibition Against
Also on January 24, 2012, the FTC announced new,
higher thresholds for the prohibition in Section 8
of the Clayton Act against interlocking directorates. Section 8
prohibits, with certain exceptions, one person from serving as a
director or officer of two competing corporations if two thresholds
are met. Applying the new thresholds, competitor corporations are
covered by Section 8 if each one has capital, surplus and undivided
profits aggregating more than $27,784,000, with the exception that
no corporation is covered if the competitive sales of either
corporation are less than $2,778,400. As with HSR thresholds, the
FTC is required to revise Section 8 thresholds annually based on
gross national product. Section 8 thresholds become effective upon
publication in the Federal Register, which is expected later this
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Hospitals considering future acquisitions of physician groups, and those that the Federal Trade Commission may view as having failed to make good on promises to improve care without hiking prices, better take notice.