On January 21, 2022, the Federal Trade Commission (“FTC”) announced the annual revisions to the applicable thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). These revisions were published in the Federal Register on January 24, 2022 and will apply to all transactions closing on or after February 23, 2022. The new minimum size of transaction threshold has been adjusted upward from $92 million to $101 million.

Under the HSR Act, the parties to any proposed acquisition of assets, voting securities, or non-corporate interests (whether directly or by means of a business combination) meeting prescribed thresholds must notify the FTC and the Antitrust Division of the Department of Justice of the transaction and wait for the expiration of a statutorily required waiting period before closing the transaction. The thresholds are revised annually proportionate to changes in the gross national product. The HSR Act utilizes a size of transaction test and size of persons tests to determine if notification is required as follows:

• Transactions valued at or below $101 million are not reportable;
• Transactions valued greater than $101 million and up to $403.9 million are reportable only if the parties meet the size of persons tests;
• Transactions valued above $403.9 million are reportable regardless of parties’ sizes.

The parties meet the size of persons tests if (i) one party has assets or annual net sales of at least $20.2 million and (ii) the other party has assets or annual net sales of at least $202 million (unless the smaller party is the target and is not engaged in manufacturing, in which case it must have total assets of $20.2 million or annual net sales of $202 million).

Notifications under the HSR Act are subject to a filing fee that is based on the size of the transaction. The acquiring party is primarily responsible for payment of the filing fee, but parties are free to negotiate otherwise. The filing fees thresholds will be:

Determining whether an HSR notification must be filed and appropriately completing the notification often requires a complex and nuanced analysis of the transaction and relevant law. Failure to properly comply with the HSR Act can result in civil penalties up to $46,517 per day. 

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

[View source.]