United States: HSR Filing Fees For Large Acquisitions May Be Increased

On May 13th, the Senate Judiciary Committee approved  and sent on to the full Senate the "Merger Filing Fee Modernization Act of 2021." The Bill, sponsored by Senators Amy Klobuchar and Chuck Grassley, and approved with bipartisan support, would raise the filing fees under the Hart-Scott-Rodino Act for large mergers and would require the fees to be adjusted annually based on changes in the Consumer Price Index. (Currently, the HSR Act's size-of-person and size-of-transaction tests are adjusted annually, but not the filing fees.)

At present, there are three levels of filing fees for HSR filings: (1) $45,000 for transactions valued at more than the filing threshold but less than $100 million "AA" ("As Adjusted"); (2) $125,000 for transactions valued at $100 million AA or more but less than $500 million AA ; and $280,000 for transactions valued at more than $500 million AA.

The Bill would decrease the filing fees for smaller acquisitions as follows: (1) reduce the fee from $45,000 to $30,000 for transactions valued at more than the filing threshold but less than $161.5 million AA; (2) reduce the fee from $125,000 to $100,000 for transactions valued at more than $161.5 million AA but less than $500 million AA; and (3) reduce the fee from $280,000 to $250,000 for transactions valued at more than $500 million AA but less than $1 billion AA.. However, the Bill imposes increased fees on transactions valued at more than $1 billion. The new fees would be  $400,000 for transactions valued between $1 billion AA and $2 billion AA; $800,000 for transactions between $2 billion AA and $5 billion AA; and $2.25 million for transactions valued at $5 billion AA or more. Interestingly, the Bill provides for annual increases in the filing fees based on the percentage increase in the Consumer Price Index, but does not provide for any decrease in the fees if there is a reduction in the CPI.

While the prior version of the Bill died in committee in 2019, with considerable bipartisan support, the prospects for the current Bill appear considerably better.

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