The Federal Trade Commission recently announced annual changes to the reporting thresholds for the Hart Scott Rodino Antitrust Improvements Act, increasing the thresholds by approximately 6.6% over 2018.
Revised HSR Act
The HSR Act established the federal pre-merger notification program, which provides the FTC and the U.S. Department of Justice with information about large mergers and acquisitions before they occur. Parties are generally required to file notifications with the FTC and DOJ and observe the HSR Act’s waiting periods if the acquisition meets “size-of-person” and “size-of-transaction” thresholds. The FTC is required by law to revise the thresholds annually, based on a change in gross national product.
Under the 2019 revisions, the size-of-transaction filing threshold will increase to $90 million from $84.4 million. The “size-of-person” threshold has also been increased to require that one person have assets or sales of $180 million and the other person has at least $18 million. Previously, those thresholds were $168.8 million and $16.9 million, respectively).
(For purposes of applying the thresholds, a “person" is the parent entity of the party involved in the transaction.)
Transactions valued at more than $359.9 million will be subject to pre-merger notification regardless of the size of the parties involved. This threshold was previously $337.6 million. The thresholds that determine HSR filing fees have also been revised. For transactions that are imminent or already underway, the applicable filing fee thresholds are those in effect at the time of notification.
The revised fee schedule is as follows:
$45,000 for transactions valued at more than $90 million but less than $180 million;
$125,000 for transactions valued at $180 million but less than $899.8 million; and
$280,000 for transactions valued at $899.8 million or more.
Persons who fail to comply with provisions of the HSA Act may be subject to fines. The FTC separately announced that under a new adjustment, the penalty for HSR Act violations is $42,530 per day.