Pre-merger notification jurisdictional thresholds and filing fees take effect Feb. 23 – interlocking directorates thresholds now in effect

The Federal Trade Commission announced that as of February 23, 2024, the reporting thresholds determining whether companies must notify federal antitrust authorities under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") about proposed mergers and acquisitions will be increased as follows:[1]

• The "size-of-transaction" threshold rises by 7.3% from $111.4 million to $119.5 million.
• The revised $119.5 million "size of transaction" threshold applies to transactions in which the acquiring party will hold voting securities, non-corporate interests, or assets valued at or above $119.5 million (as measured using the HSR Act's rules and regulations). Such transactions may require a pre-merger notification if the "size of parties" test is also satisfied and no HSR Act exemptions are applicable.
• The new 2024 HSR "size of parties" threshold requires that one party to the transaction have annual net sales or total assets of $239 million or more, and that the other party have annual net sales or total assets of $23.9 million.
• For transactions valued at more than $119.5 million but $478 million or less, no pre-merger notification is required if the "ultimate parent entities" of one or both parties to the transaction do not satisfy the "size of parties" threshold. Transactions valued at more than $478 million will be subject to pre-merger notification requirements regardless of the size of the parties, unless an HSR Act exemption applies.

Consequences for failing to comply with the HSR Act, including notification, can be substantial: in 2024 the maximum daily civil penalty for violating the HSR Act will increase from $50,120 to $51,744.

2024 HSR Filing Fees

HSR filing fees are determined by the value of the proposed transaction at the time of closing.

The FTC is increasing both filing fees and filing fee thresholds, which will take effect thirty (30) days after the official publication date in the Federal Register, as follows:

2024 Interlocking Directorate Thresholds

The FTC also announced increased thresholds for interlocking directorates, which took immediate effect upon publication in the Federal Register on January 22, 2024.

Section 8 of the Clayton Act prohibits individuals from serving as a director or officer of competing corporations if the corporations meet certain thresholds. The FTC revises the thresholds each year based on changes in gross national product. Under the new 2024 thresholds, no person may serve as a director or officer of two competing corporations if each corporation has more than $48.56 million in aggregated capital, surplus, and undivided profits.

The interlocking directorate ban does not apply if the competing sales of either corporation are less than $4.86 million or less than two percent of its total sales, or if the competitive sales of each corporation are less than four percent of that corporation's total sales.

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