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Hart-Scott-Rodino Act Annual Threshold Adjustments Announced

It is time, once again, for the annual adjustments to the jurisdictional thresholds for filing notification under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act).  On Friday, January 17, the Federal Trade Commission published new filing thresholds for pre-transaction notification of many larger transactions.  The HSR Act requires companies and investors to submit confidential filings with respect to proposed acquisitions and other transactions exceeding specified size thresholds with the FTC and the Antitrust Division of the Department of Justice, so that the agencies can assess their competitive impact before consummation.

If a transaction meets the jurisdictional tests of the HSR Act the parties to the transaction must file, unless the HSR Act or rules exempt the filings.  The incremental adjustments that occur each year are based on the year-over-year change in the GNP, and become effective 30 days after publication in the Federal Register (expected in the third full week of January). 

Beginning in late February, the “size of parties” test will be satisfied if at least one party (together with each affiliate under common control) has total assets or annual sales of at least $151.7 million, and another party (with its affiliates) has total assets or annual sales of at least $15.2 million.  The “size of transaction” test will be satisfied if the acquiring party will hold assets and/or equity interests valued at more than $75.9 million as a result of the transaction (this may include the current value of assets or equity acquired by the buyer from the seller in earlier deals).  Incremental filing thresholds for certain follow-on acquisitions are also indexed and are also adjusted, as are certain exemption thresholds.

HSR Act or Rule Provision

 

 

 

New Thresholds

$50 million “size of transaction” test

 

 

 

$75.9 million

$10 million “size of person” test

 

 

 

$15.2 million

$100 million “size of person” test

 

 

 

$151.7 million

$200 million “size of transaction” test
(applicable if size of person tests are not met)

 

 

 

$303.4 million

$50 million notification threshold

 

 

 

$75.9 million

$100 million notification threshold

 

 

 

$141.8 million

 

$500 million notification threshold

 

 

 

$758.6 million

25 percent of stock threshold
(if worth at least $1 billion)

 

 

 

25 percent of stock (if worth at least $1,517.1 million)

50 percent notification of threshold
(if over $50 million)

 

 

 

50 percent (if over $75.9 million)

HSR filing fees are based on the size of the transaction being notified.  The filing fees have not changed (despite some recent legislative threats to do so – expect more on this in the months ahead), but the deal size at which each of the three filing fee tiers becomes applicable will increase as follows:

Size of Transaction

 

 

 

Filing Fee

Greater than $75.9 million but less than $151.7 million

 

 

 

$45,000

$151.7 million or greater but less than $758.6 million

 

 

 

$125,000

$758.6 million or greater

 

 

 

$280,000

© 2021 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume IV, Number 23
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About this Author

Robin Sampson, Antitrust lawyer, Drinker Biddle
Counsel

Robin Sampson provides her clients with antitrust counseling in connection with business transactions. She helps clients evaluate the competitive impact of proposed transactions, counsels clients on communications between or among competitors, and provides guidance to clients on antitrust “gun-jumping.” Robin has extensive experience in analyzing whether a transaction must be reported to the Department of Justice and the Federal Trade Commission under the Hart-Scott Rodino Antitrust Improvements Act, and has prepared more than 300 such notifications in...

(215) 988-2561
Kenneth Vorassi, Litigation Attorney, Drinker Biddle
Partner

Kenneth M. Vorrasi represents clients in complex litigation in federal and state court, government investigations and before federal antitrust agencies to obtain clearance of mergers, acquisitions and joint ventures. He is co-chair of the Antitrust Team.

Ken dedicates his practice to antitrust and complex commercial litigation. His antitrust practice focuses on private litigation, class actions, and merger and conduct investigations brought by the DOJ, FTC, and state enforcement authorities.

202-354-1361
Joanne Lewers, Antitrust lawyer, Drinker Biddle
Partner

Joanne C. Lewers is a litigation partner and member of the Antitrust Practice Group. In addition to advising on antitrust matters, she works on consumer protection and other complex cases.

Joanne represents clients involved in state and federal antitrust suits alleging conspiracy and monopolization claims. She also appears before the federal antitrust agencies on behalf of clients seeking antitrust clearance for their proposed mergers or acquisitions. She regularly offers clients antitrust compliance counseling in a range of...

215-988-2712
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