On January 28, 2020, the US Federal Trade Commission (FTC) announced its annual update to the Hart-Scott-Rodino (HSR) Act thresholds. The HSR Act governs those deals that must be reported to the FTC and the US Department of Justice prior to being consummated.1
Pursuant to the new thresholds, a transaction will be reportable if:
- The transaction value is greater than $376 million (previously $359.9 million); OR
- (a) The transaction value is greater than $94 million (previously $90 million); AND (b) one party has net sales or total assets of $18.8 million or more (previously $18 million); AND (c) a second party has net sales or total assets of $188 million or more (previously $180 million).
The revised thresholds will apply to transactions consummated on or after February 27, 2020.
Notably, this year's percentage increase across the thresholds, at approximately 4.4%, is not as large as the percentage increase in last year's thresholds, which was 6.5%. Looking at the average percentage increases since the HSR thresholds started being adjusted, 4.4% is only slightly above the average of 4%. HSR Act thresholds are tied to the gross domestic product, and the moderation of this year's increases demonstrates that while the US economy remains healthy, last year's HSR threshold changes likely were an anomaly.
HSR Act filing fees are keyed to the value of the transaction and HSR Act thresholds. Accordingly, the HSR Act filing fee tiers will be revised as follows:
- Filing fee of $45,000 will apply to transactions valued at more than $94 million but less than $188 million (previously more than $90 million but less than $180 million).
- Filing fee of $125,000 will apply to transactions valued at $188 million or more but less than $940.1 million (previously $168.8 million or more but less than $899.8 million).
- Filing fee of $280,000 will apply to transactions valued at $940.1 million or more (previously $899.8 million or more).
Updates also were announced for certain HSR exemptions, thresholds for Interlocking Directorates under Section 8 of the Clayton Act, and the daily penalty for HSR Act violations (announced on January 13, 2020).
To help navigate the complex HSR Act rules, Mayer Brown has created an interactive presentation that provides quick and practical HSR guidance. Based on current 2020 FTC thresholds, this presentation allows you to choose the criteria that best apply to your organization or transaction and then takes you through a basic analysis of whether an HSR Act filing is necessary.
The FTC's Federal Register notice and a complete list of all HSR threshold adjustments can be found on the FTC's website.
Access the Mayer Brown Presentation (If accessing the presentation in Internet Explorer, please save the file first before viewing).
1 Hart-Scott-Rodino Antitrust Improvements Act of 1976
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