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FTC lowers reporting thresholds for mergers & acquisitions

by | Jul 5, 2022 | Mergers and Acquisitions

There has been a recent change to the rules by the Federal Trade Commission (FTC) regarding the thresholds for reporting of a merger or acquisition. Businesses and residents of New York may want to learn more about the new requirements for reporting.

According to law sources, the size of the company in dollar amounts will now be lower by $2 million. This will take effect within 30 days of the publishing of the decision by the FTC in the Federal Register.

More deals need reporting

The FTC lowered the reporting amount from $94 million to $92 million. Each year the amount changes, based on the changes in the gross national product. There are also new prohibitions on certain interlocking memberships on corporate boards of directors.

Votes were the majority

The changes had a vote of 5 for and 0 against. The commission also asked for changes by Congress to increase the funding of its work, as businesses are now larger and more complex. Filings are double what they were ten years ago.

Increase in complexity

Mergers and acquisitions have now seen a large increase. In 2019 there were 476 HSR submissions to the FTC and Department of Justice. These transactions had values of between $500 million and $1 billion. This calls for more resources and staff. Congressional senators also asked for an increase in filing fees for these larger transactions.

Experts are a need

There is more of a need for investigations and litigation, which is also more costly. High-profile merger litigation saw a huge increase, in December, in a number of large deals. These involve a challenge to staff, who are presently handling many other challenges, such as health-related absences and transition.

The reporting amount for mergers received a change. The FTC lowered the reporting amount from $94 million to $92 million. The review of business deals will now take 30 days, as well.