The Federal Trade Commission has announced the annual adjustment to notification thresholds that determine whether proposed transactions may trigger a filing obligation under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The revised thresholds will apply to all transactions that will close on or after February 27, 2020.
Under the updated thresholds, the lowest "size of transaction" notification threshold for any non-exempt acquisitions of voting securities, assets, or non-corporate interests will increase from USD 90 million to USD 94 million. For transactions valued above USD 94 million but below USD 376 million, an HSR filing may be triggered only if the below described "size of person" test is satisfied. Non-exempt transactions valued above USD 376 million will trigger an HSR filing obligation irrespective of the size of the parties involved.
The HSR Act "size of person" threshold, when applicable, generally will be satisfied if one party to the transaction has annual net sales or total assets of USD 188 million or more and the other party has USD 18.8 million or more in annual net sales or total assets. In each case, the operative "party" is the ultimate parent entity of the party to the potentially notifiable transaction.
The HSR Act filing amounts remain the same, but the relevant transaction values triggering the higher fee amounts have correspondingly increased.
- USD 45,000 for transactions valued above USD 94 million but less than USD 188 million
- USD 125,000 for transactions valued at USD 188 million or more but less than USD 940.1 million, and
- USD 280,000 for transactions valued at USD 940.1 million or more.
Compliance with the HSR Act is imperative. The FTC previously announced the annual increase of the maximum civil penalty available for HSR Act violations from USD 42,530 to USD 43,280 per day. This new maximum penalty may be imposed for any enforcement action taken on or after 14 January 2020 even if the underlying violation preceded that date.
The Federal Register notice announcing the new HSR Act notification and filing-fee thresholds can be found here. The Federal Register notice on the increase to the maximum civil penalty is available here.