The Federal Trade Commission (FTC) has announced this year's revisions to the thresholds and filing fees under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR), which will apply to all transactions closing on or after Feb. 21, 2025. The FTC is required under the Clayton Act to revise the HSR thresholds annually based on changes in the gross national product, and this year's revisions represent an increase of approximately 5.8 percent over the current thresholds. The FTC is also required to revise the related HSR filing fee schedule based on changes in the gross national product and consumer price index under the 2023 Consolidated Appropriations Act.
Under HSR requirements, parties intending to merge, purchase or sell voting securities or noncorporate interests or assets, or engage in certain other acquisition transactions must provide both the FTC and the Antitrust Division of the U.S. Department of Justice (DOJ) information regarding their operations and the proposed transaction, if certain minimum jurisdictional thresholds are met. HSR stays the consummation of a covered transaction for the waiting period specified by law based on HSR's purpose to allow the FTC and DOJ time to detect and potentially address any perceived anti-competitive effects of a transaction.
Changes to the HSR rules, which significantly increase the information required of the parties in connection with premerger notification filings, were previously announced and are currently scheduled to become effective on Feb. 10, 2025.
Revised HSR Jurisdictional Thresholds
HSR filings are generally required if both the Size of Transaction and Size of Person jurisdictional thresholds are met and no exemption is available under the HSR regulations. As of Feb. 21, 2025, the Size of Transaction threshold will be met if, as a result of the transaction, the buyer will hold voting securities, assets and/or noncorporate interests of the seller valued in excess of $126.4 million, up from the current threshold of $119.5 million.
The Size of Person threshold will generally be met as of Feb. 21, 2025, if one party to the transaction has total assets or net sales of $252.9 million or more and the other party to the transaction has total assets or net sales (if a manufacturer) of $25.3 million or more – provided that this threshold will not apply to transactions valued at $505.8 million or more. The Size of Person threshold is measured at the ultimate parent entity level of each party and includes all entities controlled by each such ultimate parent entity.
Revised HSR Filing Fees
Each buyer is required to pay a filing fee in connection with any required filing under HSR. The applicable filing fee varies based on the value of the voting securities, assets and/or noncorporate interests to be held as a result of the transaction as determined pursuant to HSR requirements.
As of Feb. 21, 2025, the HSR filing fee thresholds will be as follows:
|
Transaction Value as Determined Under HSR |
Filing Fee |
|
> $126.4 million but < $179.4 million |
$30,000 |
|
$179.4 million or more but < $555.5 million |
$105,000 |
|
$555.5 million or more but < $1.111 billion |
$265,000 |
|
$1.111 billion or more but < $2.222 billion |
$425,000 |
|
$2.222 billion or more but < $5.555 billion |
$850,000 |
|
$5.555 billion or more |
$2.39 million |
Increased Penalties for HSR Noncompliance
Noncompliance with HSR requirements may subject a person – or any officer, director or partner of such person – to civil penalties of up to $51,744 per day for each day of violation. In addition to any monetary penalties, courts may also order compliance with HSR requirements and an extension of the HSR waiting period until substantial compliance has occurred. Courts may also grant certain other equitable relief for any failure by a person to substantially comply with either the HSR premerger notification requirements or with a request by regulators for additional information once an HSR filing has been made.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
