New HSR Thresholds for 2014

Based upon changes in the gross national product, the Federal Trade Commission (FTC) has announced the annual revisions to the Hart-Scott-Rodino Antitrust Improvements Act (the HSR Act) thresholds which apply to any transaction closing on or after February 24, 2014. Revisions to thresholds are more particularly described as follows:

A. Size of Person threshold satisfaction occurs when one party to a transaction has assets or annual sales totaling at least $151.7 million and one other party involved has assets or annual sales of at least $15.2 million. If a transaction is valued at more than $303.4 million, satisfaction of this threshold is not required. [The Size of Person threshold is up from $141.8 million in 2013 and $100 million in 2001];

B. Size of Transaction threshold is met in a transaction, if the Buyer holds an aggregate amount of stock, non-corporate interests and/or assets of the Seller valued at more than $75.9 million. [The Size of Transaction threshold is up from $70.9 million in 2013 and $50 million in 2001];

C. Notification thresholds applicable to voting security purchases by minority owners will also increase February 24, 2014. Under the revised HSR Act, failure to comply with the Notification and Waiting Period requirements may result in a civil penalty of up to $16,000 per day for each day a party is in violation.

Additionally, thresholds applicable to many exemptions, including those governing foreign acquisition, will increase. However, the $500 million threshold applicable to acquisitions of producing oil and gas reserves and associated assets will not change.

Of course, this is not an exhaustive discussion of the law on these issues. For more information on this topic, please email Shannon Wilde or call him at (361) 886-3800.