The Federal Trade Commission (“FTC”) has announced its annual update to the pre-merger notification thresholds under the Hart-Scott-Rodino Act (“HSR Act”). The new thresholds, which are expected to be published in the Federal Register the week of February 18, 2019, will take effect 30 days after their publication. The FTC is required by law to revise these thresholds annually to reflect growth in the gross domestic product since the last update of the thresholds. In 2019, the reporting thresholds will increase by approximately 6.6% over the 2018 thresholds.
The HSR Act requires parties involved in transactions meeting a certain size threshold to file a pre-merger notification with the FTC and the U.S. Department of Justice. For 2019, the “size-of-transaction” threshold will increase to $90 million from $84.4 million. Transactions in which the acquiring party will hold voting securities, non-corporate interests, or assets valued at greater than $90 million may be reportable if the “size-of-person” test is also satisfied and no exceptions apply. Under the new thresholds, the size-of-person test will increase to $18.0 million for one party and $180 million for the other. Further, all transactions valued at more than $359.9 million will require a filing, regardless of the size of the parties filings.
While the thresholds to the filing fees have changed, the filing fees required to be submitted with an HSR filing will not change in 2019.
Summary of 2019 HSR Filing Thresholds:
Size-of-Transaction Threshold: $90 million
Size-of-Person Thresholds: $18 million and $180 million
Size-of-Transaction above which Size-of-Persons Test Does Not Apply: $359.9 million
Filing Fee Thresholds based on Size-of-Transaction:
- Greater than $90 million but less than $180 million: $45,000
- Greater than or equal $180 million but less than $899.8 million: $125,000
- Greater than $899.8 million: $280,000
Lastly, on February 14, 2019, the FTC announced the annual increase to the maximum civil penalty amount for violations of the HSR Act. Penalties have increased from $41,484 per day to $42,530 per day. This new penalty amount applies to civil penalties assessed on or after February 14, 2019, even when the underlying violation preceded that date.