FTC updates antitrust act notification thresholds.

The Federal Trade Commission, charged with overseeing the Hart-Scott-Rodino Antitrust Improvements Act of 1976, approved a few changes to its terms of notification Jan. 18.

The legislation provides that before certain mergers, tender offers and other acquisition transactions can close, the parties involved must file a notification and report form with the FTC and the assistant attorney general in charge of the U.S. Department of Justice's antitrust division. A 30-day waiting period typically ensues to give regulators a chance to determine whether the transaction violates antitrust laws.

Among the changes, the FTC will require parties to report transactions valued at more than $252.3 million, unless any applicable exemptions apply. Previously, parties had to report transactions valued at more than $239.2 million.

Along with the changes to transaction size, thresholds associated with party size--currently at $119.6 million in yearly sales and $12 million in total assets--will increase to $126.2 million and $12.6 million, respectively.

Transactions valued at more than $63.1 million but less than $252.3 million will not require a Hart-Scott-Rodino notification if the parent entities of one or both parties do not satisfy the "size of parties" threshold. If the transaction is valued at more than $252.3 million, parties will have to report the transaction regardless of the size of the parties, unless certain exemptions apply.

The FTC amends notification thresholds annually to reflect changes to the gross national product. Newly approved thresholds will appear in the Federal Register and will become effective 30 days following publication.

William Markham, a partner with Maldonado & Markham LLP in San Diego who litigates antitrust cases, said the information is critical for companies looking to merge or acquire others.

"Obviously, two companies that contemplate an acquisition and merger have to know whether they meet the disclosure requirements in order to go forward--they need to know whether they're under or over the threshold," he said. "If you need to make a filing and don't do so there are all kinds of penalties."

ValueAct Capital Partners, with offices in San Francisco and Boston, was forced to pay a $1.1 million civil penalty in December after it failed to file HartScott-Rodino notifications in connection with increased holdings in Gartner Inc., Catalina Marketing Corp. and Acxiom Corp.