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The Federal Trade Commission said Tuesday it is raising the monetary threshold for companies to formally notify antitrust enforcers of a merger or acquisition. Effective March 1, companies must file Hart-Scott-Rodino Act notifications with the government for any deal valued at $53.1 million, up from $50 million. All transactions valued at more than $212.3 million also are subject to premerger notification filing, up from $200 million. Deals within this range are subject to premerger notification if one party has sales or assets of at least $106.2 million, up from $100 million, and the other party has sales or assets of at least $10.7 million, up from $10 million. The FTC, according to revisions in 2001 to the HSR act, must adjust the filing thresholds based on variation in the U.S. gross national product. “The original [HSR] act had dollar thresholds, and the business community was very anxious that the new thresholds were indexed for inflation and other economic indicators and adjusted automatically,” said one legal source. How the FTC handles deal valuations is important because companies pay fees that vary according to the size of a transaction. The filing fees will not be revised. For transactions of less than $100 million, the fee is $45,000; for deals between $100 million and $500 million, the fee is $125,000; and for those of $500 million or more, the rate is $280,000. In 2000, the FTC raised the notification threshold from $15 million to $50 million. But antitrust experts said this latest move should have little effect on dealmaking. “When the thresholds were raised in 2000 after being fixed since 1976, that was significant,” said Joel Mitnick, a partner at New York law firm Sidley Austin Brown & Wood. “What’s really important is that Congress recognizes that there is a continual need to ratchet up the threshold amount. From year to year, it may not be that significant, but the changes from year five to 10 could be.” Copyright �2005 TDD, LLC. All rights reserved.

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