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The U.S. Federal Commerce Fee (FTC) authorized new premerger notification thresholds and revised HSR submitting charges below the Hart-Scott-Rodino Antitrust Enhancements Act of 1976 (HSR). The FTC revises the HSR thresholds and submitting charges yearly primarily based on adjustments within the gross nationwide product and within the client worth index. The brand new thresholds and submitting charges develop into efficient 30 days after publication within the Federal Register and are anticipated to take impact on or after February 23, 2024.
Measurement-of-Transaction Threshold
The minimal “size-of-transaction” threshold for acquisitions of voting securities, non-corporate pursuits, or belongings will improve from $111.4 million to $119.5 million.
Measurement-of-Individual Thresholds
Acquisitions with a complete mixture worth of larger than $119.5 million (up from $111.4 million) however lower than $478 million (up from $445.5 million) are doubtlessly reportable provided that the “size-of-person” threshold is met. The “size-of-person” threshold is met if one get together to the transaction has annual web gross sales or complete belongings of a minimum of $239 million (up from $222.7 million) and the opposite get together has annual web gross sales or complete belongings of a minimum of $23.9 million (up from $22.3 million).
Reportability Thresholds for Acquisitions of Voting Securities
Acquisitions of lower than 50% of an issuer’s voting shares might set off an HSR submitting the place the acquirer’s complete holdings of the issuer crosses one in all a number of reportability thresholds, assuming the Measurement-of-Individual threshold is met (when relevant) and no exemption applies.1 These thresholds have been elevated as follows:
- mixture holdings of an issuer’s voting securities valued at larger than $119.5 million however lower than $239 million
- mixture holdings of an issuer’s voting securities valued at $239 million or larger however lower than $1.195 billion
- mixture holdings of an issuer’s voting securities valued at $1.195 billion or larger
- 25% of the excellent voting securities of an issuer if the holdings are valued at larger than $2.39 billion
- 50% of the excellent voting securities of an issuer if the holdings are valued at larger than $119.5 million
Threshold Description |
Present 2023 Threshold |
New 2024 Threshold |
Measurement of Transaction |
$111.4 million |
$119.5 million |
Measurement of Individual |
$22.3 million |
$23.9 million |
Measurement of Individual |
$222.7 million |
$239 million |
Measurement of Individual |
$445.5 million |
$478 million |
Reportability threshold for an acquisition of voting securities |
$1.1173 billion |
$1.195 billion |
Reportability threshold for an acquisition of voting securities |
$2.2274 billion |
$2.390 billion |
New Submitting Price Quantities
The FTC additionally introduced new submitting charge quantities, which are actually:
Worth of Transaction |
2024 Submitting Price |
$119.5 million to < $173.3 million |
$30,000 |
$173.3 million to < $536.5 million |
$105,000 |
$536.5 million to < $1.073 billion |
$260,000 |
$1.073 billion < $2,146 billion |
$415,000 |
$2.146 billion < $5.365 billion |
$830,000 |
$5.365 billion or larger |
$2,335,000 |
FTC Revises Clayton Act Part 8 Thresholds for Interlocking Directorates
The FTC additionally revised the thresholds for interlocking directorates below Part 8 of the Clayton Act. Part 8 prohibits, with sure exceptions, an individual from serving as a director or officer of two competing firms if two thresholds are met. Part 8 applies if every competitor company has capital, surplus, and undivided earnings of greater than $10 million, although not if the aggressive gross sales of both company are lower than $1 million. These quantities are topic to annual revision; following final 12 months’s revision, they have been $45,257,000 and $4,525,700, respectively. The brand new thresholds, efficient as of January 22, 2024, are $48,559,000 and $4,855,900, respectively. The Federal Register discover on the revised Part 8 thresholds could be discovered here.
FTC Revises Most Civil Penalty Quantity for HSR Violations
Lastly, the FTC has introduced the annual improve to the utmost civil penalty quantity for HSR violations, elevating the quantity from $50,120 per day to $51,744 per day. The brand new most applies to civil penalties assessed on or after January 10, 2024, even the place the underlying violation preceded that date. The Federal Register discover on the revised civil penalty quantity could be discovered here.
1 Acquisitions of lower than 50% of an unincorporated entity don’t require an HSR submitting if the acquirer will maintain lower than 50% of the entity’s (i) earnings and (ii) belongings upon dissolution.
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