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On December 21, 2000, President Clinton signed into law a series of amendments to Section 7(A) of the Clayton Act, commonly known as the Hart-Scott-Rodino Premerger Notification Act. They take effect February 1, 2001.

The HSR Act requires parties that meet certain size tests to submit filings with the Federal Trade Commission and the Department of Justice before completing mergers, acquisitions, joint ventures and other transactions that are above the HSR Act's filing thresholds.

The following is a summary of the most important changes instituted by the new amendments:
  • The size-of-the-transaction threshold is increased from $15 million to $50 million. Transactions which result in the acquiring party holding $50 million or less of another party's assets or voting securities will, beginning February 1, 2001, generally not be reportable under the HSR Act.
  • The size-of-the-parties test is eliminated for transactions valued at more than $200 million. A transaction of that magnitude will be reportable without regard to the annual net sales or total assets of any of the parties to the transaction.
  • A new filing fee structure will replace the current flat fee of $45,000 per acquiring party. Starting February 1, 2001, the filing fee that an acquiring party is required to pay will be based on the value of the assets or voting securities to be held by the acquiring party. If the value is less than $100 million, the fee will be $45,000; $100 million or more but less than $500 million, the fee will be $125,000; $500 million or more, the fee will be $280,000.
There is no fee imposed upon any acquired party, although the parties remain free to negotiate a sharing of the fees.

The above thresholds and filing fee tiers (but not the fees themselves) will be adjusted annually with the fiscal year beginning October 1, 2005, to reflect changes in the GNP for the previous year.

The waiting period that follows substantial compliance with a formal request for additional information (commonly called a "Second Request") has been increased from 20 days to 30 days.

The FTC intends to implement certain transition rules and to issue a revised HSR Form and instructions sometime in January 2001.

This is only a summary of certain provisions of the amendments. If you would like more information, please contact our authors in our Pittsburgh office.