The “$10 million” and “$100 million” amounts applicable to the size-of-person threshold will increase to $14.2 million and $141.8 million, respectively. The size-of-person threshold applies to transactions valued at less than $200 million (as adjusted, $283.6 million) and is based on the total assets and annual net sales of the ultimate parent entities (UPEs) of the acquiring and acquired persons. In general, to be reportable, the UPE of one party to the transaction needs to have annual net sales or total assets of $10 million or more (as adjusted, $14.2 million) and the UPE of the other party must have annual net sales or total assets of $100 million or more (as adjusted, $141.8 million). There are, however, several nuances and exceptions to the size-of-person threshold that need to be examined separately for each transaction.
The increased thresholds arise from amendments to the HSR Act in 2000 that require the FTC to adjust the thresholds annually for change in the gross national product. All of the notification and exemption dollar thresholds in the HSR statute, regulations and reporting instructions that are subject to annual adjustments will also be adjusted. The new HSR dollar thresholds will be as follows:
The FTC has also announced that it will be adjusting both dollar thresholds for Section 8 of the Clayton Act to account for changes in the gross national product. Section 8, in many circumstances, forbids a person from serving as an officer or director of two competing corporations if two thresholds are met. Under the revised thresholds, effective when published in the Federal Register, Section 8 may apply when each of the competing corporations has capital, surplus and undivided profits aggregating more than $28,883,000, and each corporation's competitive sales are at least $2,888,300.