FTC Announces New 2022 HSR Reporting Thresholds and Renews Call to Congress for Additional Funding
January 25, 2022
On January 24, 2022, the Federal Trade Commission announced increases to the reporting thresholds and exemptions that, under the Hart-Scott-Rodino Act of 1976 (the “HSR Act”), dictate whether companies must notify antitrust authorities about a transaction. To keep pace with inflation, the HSR Act requires the FTC to adjust reporting and exemption thresholds annually based on changes in the gross national product. The revised thresholds apply to all transactions that close on or after February 23, 2022.
Under the new thresholds:
The minimum size-of-transaction threshold is $101.0 million (up from $92.0 million). Acquisitions below this threshold are not reportable.
Transactions exceeding the size-of-transaction threshold—but less than $403.9 million—are reportable if the ultimate parent entity of one party has sales or assets of at least $202.0 million and the ultimate parent entity of the other party has sales or assets of at least $20.2 million (up from $184.0 million and $18.4 million, respectively) (the “size-of-person” test).
Transactions valued at more than $403.9 million (up from $368.0 million) are reportable regardless of the size-of-person test.
Filing fees did not change, but the size-of-transaction thresholds on which the filing fee is based increased. Under the new thresholds, the filing fee is:
- $45,000 for transactions with a value of at least $101.0 million but less than $202.0 million;
- $125,000 for transactions with a value of at least $202.0 million but less than $1.0098 billion (up from $919.9 million); and
- $280,000 for transactions with a value of at least $1.0098 billion.
The notification threshold for 25% of the outstanding voting shares is $2.0196 billion; for 50% of the outstanding voting shares, it is $101.0 million (up from $1.8398 billion and $92.0 million, respectively).
Notably, Chair Khan and Democratic Commissioner Slaughter used the announcement of the annual adjustments as an opportunity to issue a statement on the “historic merger wave” and renew their push for Congress to increase merger-filing fees for large transactions and overall funding for the agency. In addition, the two Commissioners called on Congress to revisit other facets of the HSR Act, including the “short 30-day window” for the initial review of reportable transactions and the time the agency has to analyze data and documents submitted in response to Second Requests.
To read the FTC news release, please click here. To read the Concurring Statement of Chair Khan and Commissioner Slaughter, please click here.
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. Elaborate rules govern deal valuation and exemptions under the HSR Act.
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 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 C. Byrd, an O’Melveny counsel licensed to practice law in the District of Columbia and Maryland, Julia Schiller, an O’Melveny partner licensed to practice law in the District of Columbia, New York, and New Jersey, and Courtney Dyer, an O’Melveny partner licensed to practice law in the District of Columbia and New York, 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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