FTC Announces New 2023 HSR Reporting Thresholds and Filing Fees

On January 23, 2023, 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 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 a week).

Under the new thresholds:

The minimum size-of-transaction threshold is $111.4 million (up from $101.0 million). Acquisitions below this threshold are not reportable.

Transactions exceeding the size-of-transaction threshold—but less than $445.5 million—are reportable if the ultimate parent entity of one party has sales or assets of at least $222.7 million and the ultimate parent entity of the other party has sales or assets of at least $22.3 million (up from $202.0 million and $20.2 million, respectively) (the “size-of-person” test).

Transactions valued at more than $445.5 million (up from $403.9 million) are reportable regardless of the size-of-person test.

The notification threshold for 25% of the outstanding voting shares is $2.274 billion; for 50% of the outstanding voting shares, it is $111.4 million (up from $2.0196 billion and $101.0 million, respectively).

In addition, following the enactment of the 2023 Consolidated Appropriations Act last month, the HSR-filing-fee structure will change. The new fees will become effective 30 days after the Federal Register publishes the FTC’s notice (likely within a week). Going forward, filing fees will be adjusted annually based on the Consumer Price Index (as determined by the Department of Labor) no later than January 31 of each year. 

Both filing fees—and the size-of-transaction thresholds (on which the filing fee is based)—were altered. They are as follows:

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 $111.4 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.

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, Courtney Dyer, an O'Melveny partner licensed to practice law in the District of Columbia and New York, and Julia Schiller, an O'Melveny partner licensed to practice law in the District of Columbia, New York, and New Jersey, 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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