The FTC also revised the thresholds that trigger prohibitions on certain interlocking directorates under Section 8 of the Clayton Act.
Premerger Notification Thresholds
Pursuant to the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act), companies proposing a merger or acquisition must notify regulators and satisfy a mandatory waiting period if the size of the parties involved and the value of a transaction exceeds certain filing thresholds, absent an applicable exemption. The FTC revises the thresholds annually, based on the change in gross national product (GNP).
For 2015, the threshold will increase from $75.9 million to $76.3 million, thanks to the improving economy. Accordingly, if the merger or acquisition is valued at $76.3 million or more and the parties exceed certain size limits (one of the parties to the transaction has $152.5 million or more in annual sales or total assets and the other has $15.3 million or more in annual sales or total assets), both parties may be required to submit a Premerger Notification to the FTC and the Department of Justice. In addition, if the transaction is valued at $305.1 million or more, filing may be required, regardless of the size of the parties to the transaction. The amended threshold takes effect on February 20, 2015.
Interlocking Directorates Thresholds
Section 8 of the Clayton Act prohibits, with certain exceptions, one person from serving as a director or officer of two competing corporations if two thresholds are met. The FTC is required to revise the thresholds each year to reflect changes in the GNP.
Effective January 21, 2015, competitor corporations are covered by the Section 8 prohibition if each one has capital, surplus, and undivided profits aggregating more $31,084,000. However, no corporation is covered if the competitive sales of either are less than $3,108,400.