2021 HSR Thresholds Announced: $92 Million

Goodwin

SUMMARY

As required by the HSR Act, on February 1, 2021, the U.S. Federal Trade Commission (“FTC”) released its annual adjustments to the reporting thresholds. The key number to remember is now $92 million. Note, this is a decrease from the $94 million threshold in 2020. Generally, transactions valued at $92 million or more must be reported and cleared by federal antitrust authorities before the transaction may close. The adjustments to the thresholds were published in the Federal Register on February 2, 2021 and become effective 30 days after publication, March 4, 2021. The revised thresholds will apply to all transactions that close on or after the effective date.

Each year, the FTC adjusts the reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act) based on changes in gross national product. On February 1, 2021 the FTC announced the revised thresholds. Below are the current and new thresholds:

Test 2020 Threshold **NEW**
Adjusted 2021 Threshold

Size-of-Transaction

$94 million

$92 million

Size-of-Person as Measured by Annual Net Sales or Total Assets

$18.8 million for one party

AND

$188 million for the other party

$18.4 million for one party

AND

$184 million for the other party

Size-of-Transaction Threshold at Which Size-of-Person Test No Longer Applies

$376 million

$368 million

The practical effect of this change is that transactions valued in excess of $92 million will be subject to the reporting and waiting requirements of the HSR Act. In general, the size-of-parties test will be satisfied only if one party to the transaction has annual net sales or total assets of $184 million or more and the other party has annual net sales or total assets of $18.4 million or more.

The interlocking directorate thresholds under Section 8 of the Clayton Act have also been adjusted to account for changes in the gross national product. Section 8 may preclude a person from serving as an officer or director of two competing corporations when (1) each of the competing corporations has capital, surplus, and undivided profits aggregating more than $37,382,000, and (2) each corporation’s competitive sales are at least $3,738,200.

The current premerger filing fee schedule is:

  • $45,000 for transactions valued at $92 million or more, but less than $184 million
  • $125,000 for transactions valued at $184 million or more, but less than $919.9 million
  • $280,000 for transactions valued at $919.9 million or more

Earlier this year, the FTC also announced that the maximum civil penalty amount has increased from $43,280 to $43,972 per day for certain violations of the FTC Act, HSR Act, and Energy Policy and Conservation Act.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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