Key Takeaways

• On Jan. 25, the Federal Trade Commission (FTC) published a notice in the Federal Register announcing the 2023 filing thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act).
• The FTC also announced a new filing fee structure, which will be adjusted annually.
• The new thresholds and fee structure will apply to all HSR filings submitted on or after Feb. 27, 2023.
• Please see the new 2023 thresholds for both size of the person and size of the transaction tests outlined herein.

On Jan. 25, the Federal Trade Commission (FTC) published a notice in the Federal Register announcing the 2023 filing thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act).[1] The notice also announced the new HSR filing fee structure as mandated by the recently enacted Merger Filing Fee Modernization Act of 2022.[2] The new thresholds and filing fee structure will apply to all HSR filings submitted on or after Feb. 27, 2023.[3]

2023 Thresholds

Parties to transactions that exceed certain thresholds are required to submit an HSR filing and observe a 30-day waiting period before consummating the transaction. These thresholds are set by the HSR Act and are subject to annual adjustments for changes in the gross national product. Failure to submit a required HSR filing could result in a civil penalty of $50,120 per day until the corrective filing is submitted.[4] Therefore, it is critical to determine, at the outset, whether a transaction is HSR reportable. To determine whether a transaction is reportable, practitioners must analyze the Size of Transaction and the Size of Persons involved in the transaction.

Size of Transaction is the first step in any HSR reportability analysis. The HSR Act contains two thresholds for Size of Transaction. First, $50 million, as adjusted, is the baseline for reportability. Transactions that exceed this size, if the parties to the transaction are also large enough, are reportable. For 2023, the $50 million, as adjusted, threshold is $111.4 million.[5] If the transaction exceeds $200 million, as adjusted, the transaction is reportable regardless of the size of the parties to the transaction. For 2023, the $200 million, as adjusted, threshold is $445.5 million.[6]

Assuming the Size of Transaction exceeds $111.4 million but is less than $445.5 million, the next step is to look to the Size of Persons who are parties to the transaction. With certain exceptions and nuances, the Size of Person test is met where one party to the transaction has assets or revenue exceeding $10 million (the Smaller Size of Person), as adjusted, and the other has assets or revenue exceeding $100 million (the Larger Size of Person), as adjusted. For 2023, the Smaller Size of Person is $22.3 million and the Larger Size of Person is $222.7 million.[7] If the Size of Person test is not met, the transaction is not reportable.

Parties to potentially reportable transactions should consult experienced HSR counsel for guidance on reportability determinations.

New Filing Fee Structure

Parties that submit HSR filings must also pay a filing fee. Historically, there has been a three-tier structure for filing fees, determined based on the size of transaction. In 2022, Congress passed the Merger Filing Fee Modernization Act, which created a new six-tier filing fee structure.[8] For smaller transactions, this new structure actually results in a smaller filing fee than under the previous structure. However, for most larger transactions, the new filing fee is much higher.

The cutoffs for each filing fee threshold will be updated each year to reflect changes in the gross national product, and the amount of the filing fee for each threshold will be increased annually to match increases in the Consumer Price Index.[9] Beginning Feb. 27, 2023, HSR filing fees will be as follow:[10]

• Transactions of at least $111.4 million but less than $161.5 million...... $30,000
• Transactions of at least $161.5 million but less than $500 million...... $100,000
• Transactions of at least $500 million but less than $1 billion.............. $250,000
• Transactions of at least $1 billion but less than $2 billion................... $400,000
• Transactions of at least $2 billion but less than $5 billion................... $800,000
• Transactions of at least $5 billion..................................................... $2,250,000

It is critical that the parties determine the proper filing fee and submit it to the FTC on the same day any HSR filings are made. A delayed or insufficient payment could result in a delay of the 30-day waiting period, further delaying the consummation of the transaction.

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