FTC Announces Revised, Other HSR Thresholds for 2018

January 30, 2018
Firm Publication

The Hart-Scott-Rodino (HSR) Act requires parties to transactions that meet certain thresholds to notify the Department of Justice (DOJ) and Federal Trade Commission (FTC) and observe a waiting period prior to closing, unless certain exemptions apply. These thresholds are adjusted annually.

On January 29, 2018, the FTC announced revised HSR thresholds, which will be effective sometime in late February or very early March 2018, 30 days after they are published in the Federal Register. The revised thresholds are:

Size-of-Transaction Test: The threshold used in the size-of-transaction test will increase from $80.8 million to $84.4 million.

Size-of-Persons Test: The sales and assets thresholds used in the size-of-persons test will increase from $16.2 million to $16.9 million and from $161.5 million to $168.8 million, respectively. The size-of-transaction threshold above which the size-of-persons test no longer applies will increase from $323.0 million to $337.6 million.

Greater Notification Thresholds: These thresholds, which apply to subsequent acquisitions of voting securities made within five years after expiration or termination of the waiting period of a previous HSR filing for an acquisition of voting securities from the same issuer, were revised as follows:

Previous Threshold

Revised Threshold

$161.5 million

$168.8 million

$807.5 million

$843.9 million

25% of voting securities if valued at greater than $1,615 million

25% of voting securities if valued at greater than $1,687.8 million

50% of voting securities if valued at greater than $80.8 million

50% of voting securities if valued at greater than $84.4 million

Filing Fees: Filing fee thresholds based upon the value of assets or voting securities being acquired will be revised as follows:

Value of Transaction

Filing Fee

$84.4 million to
$168.8 million

$45,000

$168.8 million to
$843.9 million

$125,000

$843.9 million or more

$280,000

Penalty for HSR Violations: The penalty for HSR violations increased last year from $16,000 per day to $40,000 per day and is now annually adjusted. The daily penalty for HSR violation was increased from $40,654 to $41,484.

FTC Revises Clayton Act Section 8 Thresholds for Interlocking Directorates

The FTC also announced revised thresholds for interlocking directorates under Section 8 of the Clayton Act. Section 8 prohibits, with certain exceptions, a person from serving as a director or officer of two competing corporations. As a result of this year’s adjustments, which became effective on January 29, 2018, Section 8 applies to corporations with capital, surplus and undivided profits aggregating more than $34,395,000, unless the competitive sales of either corporation are less than $3,439,500; the competitive sales of either corporation are less than 2 percent of that corporation’s total sales; or the competitive sales of each corporation are less than 4 percent of that corporation’s total sales.