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On January 23, 2023, the Federal Trade Commission (FTC) released the revised Hart-Scott-Rodino (HSR) Act jurisdictional thresholds for 2023. The FTC is required by law to review the HSR Act monetary jurisdiction thresholds each year based on changes in gross national product. The revised thresholds will take effect on or about February 22, 2023 for transactions closed on or after that date. The 2022 thresholds will continue to apply to transactions closed prior to the Effective Date.
Minimum submission thresholds. Under the HSR Act, 15 USC 18a, transactions that exceed the “transaction size” threshold and (in most cases) “person size” thresholds must be reported to the FTC and the U.S. Department of Justice before they can close (unless an exemption applies). The revised thresholds for 2023 (compared to the 2022 thresholds) are:
|
Legal test |
2022 |
2023 |
|
Transaction size (SOT) |
$101 million |
$111.4 million |
|
Size of persons (SOP) |
$20.2 million |
$22.3 million |
|
Large Transactions SOP Not applicable |
$403.9 million |
$445.5 million |
Incremental archiving thresholds. HSR filings may be required not only for initial purchases of voting securities whose value exceeds the minimum SOT a filing can trigger ($111.4 million for 2023), but also for subsequent purchases of voting securities exceeding incremental SOT thresholds . New HSR filings may be required for purchases of voting securities that cause the acquirer’s assets to exceed these higher, incremental thresholds, even if an HSR filing has been made for prior purchases at a lower threshold. The incremental SOT thresholds for 2023 will be:
- $222.7 million
- $1.1137 billion
- 25 percent of an issuer’s outstanding voting securities if valued at more than $2.2274 billion1
Notes
- ZOTTransaction size is based on the total value of voting securities, non-business interests or assets held by the acquirer as a result of an acquisition.
- The total value of the voting securities to be held must be based on the current value of the current positions (mark to market) plus the value of the additional voting securities to be acquired.
- Special aggregation rules apply to acquisitions of non-business interests and assets, so check with your antitrust team about these types of transactions.
- ZOPThe SOP is determined by the respective total assets or annual net sales of the parties. One party to the transaction must have total assets or annual net sales of $222.7 million and another party to the transaction must have total assets or annual net sales of $22.3 million. If the target is the smaller party and not engaged in production, then it must have total assets of $22.3 million or more.
- Large TransactionsIf the transaction value exceeds $445.5 million, the SOP thresholds no longer apply and a transaction may be subject to HSR based solely on the value of any voting securities, non-business interests or assets that are subject to the transaction as a result of the transaction. acquisition are held.
Submission Fee. Finally, if an HSR Act notice is required, there are tiered filing fees based on the SOT being reported (note that there is only one filing fee per transaction). Under the Merger Modernization Act of 2022, Congress has directed the FTC to introduce a rule that increases filing fees for larger transactions and reduces fees for smaller transactions. For 2023, the adjusted HSR Act filing rates are:
- $30,000 transactions worth less than $161.5 million
- $100,000 transactions worth $161.5 million but less than $500 million
- $250,000 transactions worth $500 million but less than $1 billion
- $400,000 transactions worth $1 billion but less than $2 billion
- $800,000 transactions worth $2 billion but less than $5 billion
- $2.25 million transactions worth $5 billion or more
If you have any questions about these rule changes or HSR in general, feel free to contact Scott Sher (202-973-8822), Michelle Yost Hale (202-973-8836), Ben Labow (415-947-2077), Kim Biagioli (202.937.8831), Todd Hahn (212-497-7749), or another member of the antitrust and competition practice at Wilson Sonsini Goodrich & Rosati.
[1] Deposits may also be required if, as a result of the acquisition, the acquirer will hold 50 percent or more of an issuer’s outstanding voting securities.
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Sources 2/ https://www.wsgr.com/en/insights/2023-hsr-act-adjusted-filing-thresholds.html The mention sources can contact us to remove/changing this article |
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