CURRENT HSR THRESHOLDS AS OF 2011

COMMERCE TEST SATISFIED?

SIZE OF TRANSACTION (value of acquired voting securities and assets)1

SIZE OF PERSON2

REPORTABLE?

No Yes Yes

N/A $66 million or less Greater than $66 million; AND $263.8 million or less

N/A N/A Neither party has $131.9 million in annual net sales or total assets. 3 Acquiring person has at least $131.9 million in annual net sales or total assets; AND Acquired person is engaged in manufacturing4 and has at least $13.2 million in annual net sales or total assets. Acquiring person has at least $131.9 million in annual net sales or total assets; AND Acquired person is not engaged in manufacturing and has at least $13.2 million in total assets.5 N/A

NO NO NO

Yes

Greater than $66 million; AND $263.8 million or less

YES

Yes

Greater than $66 million; AND $263.8 million or less

YES

Yes

Greater than $263.8 million

YES

HSR covers acquisitions of minority as well as controlling interests. Accordingly, HSR requires filings each time a designated notification threshold is exceeded. There are four notification thresholds in addition to the initial $66 million threshold. A new filing is required anytime a new notification threshold is exceeded, except that once an acquiring person has acquired 50 percent or more of the voting securities of an issuer, no further filings are required to increase that stake.

1

Value is determined by taking the greater of purchase price or Market Price (if acquiring publicly traded securities) or Fair Market Value (if acquiring not publicly traded securities or assets). Value also must take into account securities/assets of the acquired person held by the acquiring person prior to the change of control transaction. Market Price is defined as the lowest closing price in the 45-calendar-day period prior to the execution of the contract or letter of intent. Fair Market Value is defined as a formal written estimation of the value of the assets and voting securities being acquired that is made (i) in writing, (ii) in good faith, (iii) according to the acquiring UPE¶s ordinary accounting principles, (iv) by the board of director of the acquiring person, or by a person delegated by that board, and (v) within the 60 calendar days immediately preceding the HSR filing. 2 Person refers to Ultimate Parent Entity ± the person who controls an entity without in turn being controlled by anyone else. 3 Sales means annual net sales as determined by the most recently regularly prepared annual income statement and total assets means total assets as determined by the most recent regularly prepared balance sheet. 4 Manufacturing is defined as producing products within NAICS Sectors 31-33 and deriving at least $1 million from such products. Neither software nor services are usually defined as manufacturing. 5 Therefore, if an acquiring person has at least $131.9 million in annual net sales or total assets but the acquired person is not engaged in manufacturing, even if the acquired person has at least $13.2 million in annual net sales, if the acquired person does not have at least $13.2 million in total assets, NO filing is required.

CURRENT HSR THRESHOLDS AS OF 2011

ADDITIONAL SIZE-OF-TRANSACTION THRESHOLDS Voting securities or assets valued at $131.9 million or greater but less than $659.5 million Voting securities or assets valued at $659.5 million or greater 25% of the voting securities, if the 25% is valued at greater than $1.319 billion 50% of the voting securities of an issuer, if the 50% is valued at greater than $66 million Once the 50% is crossed, subsequent acquisitions of securities of that acquired entity are exempt. The Rules require that the acquiring person consummate the filed-for acquisition within one year after the expiration of the waiting period. If the transaction is not completed in one year, a new filing would be required. Once the filed-for acquisition is timely consummated, the acquiring person can make additional acquisitions from the acquired person, up to the next higher notification threshold, for a period of five years, after which a new filing would be required for acquisitions that exceed the previously filed-for threshold. HSR requires the acquiring person to pay a filing fee. The fee varies with the size of the notified transaction. Although the Rules require the buyer to pay the fee (procedurally, the fee must be remitted to the FTC by the buyer), the parties often agree to share this expense. SIZE OF TRANSACTION Less than $131.9 million $131.9 million or more, and less than $659.5 million $659.5 million or more FILING FEE $45,000 $125,000 $280,000

Sign up to vote on this title
UsefulNot useful