FTC revises Hart Scott Rodino thresholds for 2021



On February 1, 2021, the Federal Trade Commission (FTC) announced revised jurisdictional thresholds for reporting transactions pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). The new thresholds for HSR notification become effective on March 4, 2021.

Changes to the HSR reporting thresholds

Filing threshold

Section 7A of the Clayton Act, commonly known as the HSR Act, requires all persons contemplating certain mergers, acquisitions, joint ventures and corporate and non-corporate formations (e.g., LLCs and LPs) that meet or exceed the HSR Act's jurisdictional thresholds (1) to notify the FTC Bureau of Competition and the US Department of Justice (DOJ) Antitrust Division and (2) to wait the statutory 30-day period before consummating the transaction (unless early termination of the waiting period is granted). Pursuant to the 2000 Amendments, the FTC is required to revise the jurisdictional thresholds annually based on the change in gross national product.

Not reportable

No transaction resulting in an acquiring person holding an aggregate total amount of voting securities or assets in the acquired party of less than US$92 million (down from the prior level of US$94 million) will need to be reported under the rules. (Please note, however, that transactions with values below this threshold are still subject to antitrust review by the FTC or the DOJ's Antitrust Division).

Always reportable

All acquisitions that result in an acquirer holding an aggregate total amount of the voting securities or assets of the acquired party in excess of US$368 million (formerly US$376 million) will be reportable, unless otherwise exempted.

‘Size of the person’ test

Acquisitions valued between US$92 million and US$368 million are reportable based on the size of the acquiring person and the size of the acquired person (i.e., the "size of the person" test). Generally, this test requires that one side of the transaction have sales or assets of at least US$18.4 million (down from US$18.8 million) and the other side have sales or assets of at least US$184 million (down from US$188 million). The filing fees remain the same and apply to the revised thresholds as follows:

Value of assets or voting securities to be held Fee amount
Greater than US$92 million but less than US$184 million US$45,000
US$184 million or greater but less than US$919.9 million US$125,000
US$919.9 million or greater US$280,000

Civil Penalty:

On January 11, 2021, the FTC separately announced that the maximum civil penalty amount for violations of the HSR Act will increase from US$43,280 to US$43,792 per day, effective upon publication in the Federal Register. The new penalty levels apply to civil penalties assessed after the effective date of the adjustment, including civil penalties whose associated violation predated the effective date.

Further information regarding revisions to the HSR Act can be found on the FTC website.

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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