FTC Announces New 2024 HSR Reporting Thresholds and Filing Fees
January 23, 2024
Yesterday, the Federal Trade Commission announced increases to the reporting thresholds and exemptions that dictate whether companies must notify antitrust authorities about a transaction. To keep pace with inflation, the Hart-Scott-Rodino Act of 1976 (the “HSR Act”) requires the FTC to adjust these thresholds annually based on changes in the gross national product. The revised thresholds will apply to all transactions that close on or after the effective date, which is 30 days after the Federal Register publishes the FTC’s announcement (likely within the next week).
In addition, the FTC announced updated filing fees, which are also adjusted annually based on changes in the GNP as well as the consumer price index pursuant to last year’s Consolidated Appropriations Act. Filing fees are determined by the value of the transaction at the time of filing.
Under the new thresholds:
The minimum size-of-transaction threshold is $119.5 million (up from $111.4 million). Acquisitions below this threshold are not reportable.
Transactions exceeding the size-of-transaction threshold—but less than $478.0 million—are reportable if the ultimate parent entity of one party has sales or assets of at least $239.0 million and the ultimate parent entity of the other party has sales or assets of at least $23.9 million (up from $222.7 million and $22.3 million, respectively) (the “size-of-person” test).
Transactions valued at more than $478.0 million (up from $445.5 million) are reportable regardless of the size-of-person test.
Both filing fees—and the size-of-transaction thresholds (on which the filing fee is based)—were altered. They are as follows:
| Filing Fee | Size of Transaction as Determined Under Section 7A(a)(2) of the Act |
|
$30,000 |
Less than $173.3 million |
|
$105,000 |
Not less than $173.3 million but less than $536.5 million |
|
$260,000 |
Not less than $536.5 million but less than $1.073 billion |
|
$415,000 |
Not less than $1.073 billion but less than $2.146 billion |
|
$830,000 |
Not less than $2.146 billion but less than $5.365 billion |
|
$2.335 million |
$5 billion or more |
The notification threshold for 25% of the outstanding voting shares is $2.39 billion; for 50% of the outstanding voting shares, it is $119.5 million (up from $2.2274 billion and $111.4 million, respectively).
Even if a transaction is reportable based on the above thresholds, it may qualify for one of the HSR Act’s exemptions, some of which also contain changed financial thresholds. For example, a US person’s acquisition of a foreign issuer’s stock is exempt, unless the foreign issuer has either US assets or sales exceeding $119.5 million. Elaborate rules govern deal valuation and exemptions under the HSR Act. Consult HSR counsel to determine whether a deal is reportable.
To read the FTC news release, please click here.
If you have any questions about the new HSR size-of-transaction thresholds or HSR and antitrust/competition regulations and rulemaking more generally, please contact a member of our Antitrust & Competition team.
This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Courtney Dyer, an O’Melveny partner licensed to practice law in New York and the District of Columbia, Julia Schiller, an O'Melveny partner licensed to practice law in the District of Columbia, New Jersey, and New York, and Courtney C. Byrd, an O'Melveny counsel licensed to practice law in the District of Columbia and Maryland, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.
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