On Feb. 1, 2021, the Federal Trade Commission (FTC) announced it is publishing revised reporting thresholds for premerger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). For the first time in a decade, the filing thresholds declined.
The HSR Act imposes two important obligations on parties to certain mergers. If a merger exceeds thresholds under the HSR Act, parties to the merger generally must first file a premerger notification with the FTC and the Antitrust Division of the U.S. Department of Justice, and then let a waiting period expire before consummating the merger. The law also requires the FTC to revise those thresholds each year in accordance with changes in the gross national product.
The new, lower thresholds for 2021, which take effect 30 days after publication in the Federal Register, are as follows:
- $92 million for the “size of transaction” test. A transaction is reportable only if it meets the size of transaction test — only if the value of all the voting securities, non-corporate interests and assets being acquired exceed this threshold.
- $18.4 million and $184 million for the “size of person” test. This test looks to the value of both parties to a merger. A transaction satisfies this test when the value of one party exceeds the larger threshold and the value of the other party exceeds the smaller threshold. Unless an exemption applies, a transaction meeting the size-of-transaction test is reportable if it also satisfies the size-of-person test.
- $368 million for transactions not meeting the size-of-person test. This threshold ensures that the FTC receives notice of large mergers even when the parties themselves are not large enough to satisfy the size-of-person test. Thus, any transaction exceeding this threshold is reportable unless an exemption applies.
In its announcement, the FTC also revised thresholds for filing fees. Although the fee amounts remain the same, the commission did lower the thresholds for those fees. For 2021, the filing-fee thresholds are as follows:
- $45,000 for transactions valued at less than $184 million
- $125,000 for transactions valued from $184 million to $919.9 million
- $280,000 for transactions valued at $919.9 million or more