January 26, 2016

FTC Increases HSR Notification Thresholds for 2016

Every year, the dollar thresholds under the HSR Act are adjusted for changes in the gross national product. The new thresholds were published in the Federal Register on January 26, 2016, and will go into effect on February 25, 2016.

Most importantly, the size-of-transaction threshold will increase from the current $76.3 million to $78.2 million, so that once effective acquisitions of voting stock or assets valued at more than $78.2 million may be reportable.

For more information on the revised thresholds, click here.
For the text of the FTC's Federal Register notice, click here.

Kelly Karapetyan


The Hart-Scott-Rodino Act
The HSR Act form and instructions
FTC HSR web page

Categories: US Mergers


January 15, 2016

Antitrust Reverse Termination Fees--2016 Q1 Update

This post updates one we did last year analyzing antitrust reverse breakup fees in public deals since January 1, 2005.

An antitrust reverse termination fee (ARTF), sometimes called an antitrust reverse breakup fee, is a fee payable by the buyer to the seller if and only if the deal cannot close because the necessary antitrust approvals or clearances have not been obtained. The idea behind an antitrust reverse termination fee is twofold: (1) it provides a financial incentive to the buyer to propose curative divestitures or other solutions to satisfy the competitive concerns of the antitrust reviewing authorities and so permit the deal to close, and (2) it provides the seller with some compensation in the event the deal does not close for antitrust reasons.

Our sample now covers 926 strategic negotiated transactions announced between January 1, 2005, and December 31, 2015. Of these, 104 transactions, or 11.2% of the total, had antitrust reverse termination fees. The fees were very idiosyncratic and showed no statistically significant relationship to the transaction value of the deal or trend over time, with fees ranging from a low of 0.1% to a high of 39.8%. The average antitrust reverse termination fee for the sample was 5.5% of the transaction value, although several high percentage fees skewed the distribution to the high end. A better indicator may be the median, which was 4.3% of the transaction value.

Frequency of Antitrust Reverse Breakup Fees

NB: The percentage intervals on the horizontal axis are not of equal size.

Significantly, of the 83 transactions with an antitrust reverse termination fee for which the antitrust reviews have been completed, 62, or about 70%, were cleared without any antitrust challenge. One transaction (AT&T/T-Mobile) was terminated in the course of litigation with the Antitrust Division, 20 were subject to only a DOJ or FTC consent order, two (Boston Scientific/Guidant and Hexion/Huntsman) were subject to both an FTC consent order and EC undertakings, and one (Federated/May) was subject to an assurance agreement with a group of state attorneys general. Several deals did not close for nonantitrust reasons.

Dale Collins

  Antitrust Reverse Termination Fees--Data Set (January 1, 2005 through December 31, 2015)


December 23, 2015

Airfreight: Major Defeat for the European Commission

The General Court annulled the airfreight decision adopted in November 2010 by which the European Commission fined a number of air freight carriers EUR 799 million for a price fixing cartel. According to the Court, the grounds of the decision and the operative part of the decision were contradictory. See here for our analysis of the case.

Categories: EU Cartels