On January 23, 2023, the Federal Trade Commission (FTC) released the revised Hart-Scott-Rodino (HSR) Act jurisdictional thresholds for 2023. The FTC is required by law to revise the HSR Act monetary jurisdictional thresholds each year based on changes in the gross national product. The revised thresholds will become effective on or about February 22, 2023, for transactions closing on or after that date. The 2022 thresholds will remain applicable for transactions that close before the effective date.
Minimum Filing Thresholds. Under the HSR Act, 15 U.S.C. §18a, transactions that exceed the "size-of-transaction" threshold and (in most cases) "size-of-person" thresholds must be reported to the FTC and the U.S. Department of Justice before they can close (unless an exemption applies). The revised thresholds for 2023 (compared to the 2022 thresholds) are:
Incremental Filing Thresholds. HSR filings may be required not only for initial purchases of voting securities valued in excess of the minimum SOT that can trigger a filing ($111.4 million for 2023), but also for subsequent purchases of voting securities that exceed incremental SOT thresholds. New HSR filings may be required for purchases of voting securities that result in the acquiring person's holdings crossing these higher, incremental thresholds, even if an HSR filing was made for previous purchases at a lower threshold. The incremental SOT thresholds for 2023 will be:
- $222.7 million
- $1.1137 billion
- 25 percent of the outstanding voting securities of an issuer if valued at more than $2.2274 billion1
Notes
- SOT—The transaction size is based on the total value of voting securities, noncorporate interests, or assets to be held by the acquiring person as a result of an acquisition.
- The total value of voting securities to be held must be based on the current value of present holdings (“marked to market”) plus the value of the additional voting securities to be acquired.
- Special aggregation rules apply to acquisitions of noncorporate interests and assets, so please check with your antitrust team regarding these types of transactions.
- SOP—The SOP is determined by the parties’ respective total assets or annual net sales. One party to the transaction must have total assets or annual net sales of $222.7 million and another party to the transaction must have total assets or annual net sales of $22.3 million. If the target is the smaller party and not engaged in manufacturing, then it must have total assets of $22.3 million or more.
- Large Transactions—If the transaction value exceeds $445.5 million, then the SOP thresholds no longer apply and a transaction may be subject to HSR based solely on the value of voting securities, noncorporate interests, or assets to be held as a result of the acquisition.
Filing Fees. Finally, if an HSR Act notification is required then there are tiered filing fees based on the SOT being reported (note that there is only one filing fee per transaction). Pursuant to the 2022 Merger Filing Fee Modernization Act, Congress directed the FTC to implement a rule that increases filing fees for larger transactions while decreasing fees for smaller transactions. For 2023, the adjusted HSR Act filing fees are:
- $30,000—transactions valued less than $161.5 million
- $100,000—transactions valued at $161.5 million but less than $500 million
- $250,000—transactions valued at $500 million but less than $1 billion
- $400,000—transactions valued at $1 billion but less than $2 billion
- $800,000—transactions valued at $2 billion but less than $5 billion
- $2.25 million—transactions valued at $5 billion or more
[1] Filings may also be required if the acquiring person will hold 50 percent or more of an issuer’s outstanding voting securities as a result of the acquisition.
