The Federal Trade Commission (“FTC”) announced Jan. 23 annual revisions to the applicable thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). These revisions will apply to all transactions closing on or after Feb. 22. The new minimum size of transaction threshold has been adjusted upward, from $101 million to $111.4 million.

Under the HSR Act, the parties to any proposed acquisition of assets, voting securities or non-corporate interests 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 30-day waiting period before closing the transaction. The thresholds are revised annually proportionate to changes in the gross national product. The HSR Act utilizes size-of-transaction and size-of-persons thresholds to determine if notification is required as follows:

• Transactions valued at or below $111.4 million are not reportable
• Transactions valued greater than $111.4 million and up to $445.5 million are reportable only if the parties meet the size of persons thresholds
• Transactions valued above $445.5 million are reportable regardless of parties’ sizes

The parties meet the size-of-persons thresholds if one party has assets or annual net sales of at least $22.3 million and the other party has assets or annual net sales of at least $222.7 million (unless the smaller party is the target and is not engaged in manufacturing, in which case it must have total assets of $22.3 million or annual net sales of $222.7 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. In accordance with the 2023 Consolidated Appropriations Act, the FTC established new filing fee tiers. The new thresholds and associated fees will be:

Determining whether an HSR notification must be filed and appropriately completing the notification form often require 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 $50,120 per day. 

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