On January 10, 2025, the Federal Trade Commission (“FTC”) announced the annual changes to the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the “HSR Act”) pre-merger notification thresholds. The thresholds for 2025 increased by 5.8% from the 2024 amounts, based on the change in gross national product during 2024. The revised thresholds will apply to any transaction that closes on or after February 21^st, 2025. Upon this date, the HSR “size of transaction” threshold will increase from $119.5 million to $126.4 million.

General Summary

As a general summary of the HSR Act, the FTC and Department of Justice must be notified before the consummation of mergers, acquisitions, and other transactions that meet certain monetary thresholds. Once the parties have filed their HSR Act Notification and Report Forms, the enforcement agencies have up to 30 days after the date all HSR filings have been made and the applicable filing fee is paid, to decide whether to seek additional information—a process commonly known as a “second request.” The parties also have the option to request “Early Termination” which, if granted, will shorten the 30-day waiting period to approximately two weeks, however, Early Termination grants are currently suspended.^[1] If the 30-day waiting period expires without the issuance of a second request, or if Early Termination is granted, the parties are free to close the transaction immediately. If a second request is issued, the government has 30 days from the date the parties comply with the request to decide whether to let the transaction proceed or attempt to block it in court. 

New Thresholds

The new thresholds will increase the minimum value of a transaction that could trigger an HSR Act filing.  The updated thresholds are as follows:

• For transactions with a value of $126.4 million or less, an HSR Act filing is not required.
• For transactions with a value of more than $126.4 million, but less than $505.8 million, whether or not an HSR Act filing is required depends upon whether the “size of person” test is met. The “size of person” test requires an HSR Act filing if one party (at the UPE level) has annual net sales or total assets of $252.9 million or more and the other party (at the UPE level) has annual net sales or total assets of $25.3 million or more (unless the acquired person is not a manufacturer, in which case only total assets are considered).
• For transactions with a value of $505.8 million or more, an HSR Act filing is required.

Notification Threshold for Voting Securities

The HSR Act has an additional set of notification thresholds for parties acquiring voting securities. An acquiring party must file an HSR Act notification if the transaction pushes that acquiring party over one of the following thresholds:

• An aggregate total value of voting securities between $126.4 million and $252.9 million.
• An aggregate total value of voting securities between $252.9 million and $1.264 billion.
• An aggregate total value of voting securities worth $1.264 billion or greater.
• 25% of an issuer’s outstanding voting securities, if worth $2.529 billion or more.
• 50% of an issuer’s outstanding voting securities, if worth $126.4 million or more.

Filing Fee

The FTC also announced the new filing fee tiers. These new filing fees will take effect on February 21^st, 2025, and will apply to transactions for which an HSR Act Notification and Report Form is filed, either on or after that date.

Civil Penalty

Finally, the FTC also recently imposed changes to the maximum daily civil penalty for violations of the HSR Act, increasing the penalty from $51,744 per day to $53,088 per day. This change became effective on January 17, 2025. This change applies to penalties that are assessed after January 17, 2025, even if the actions causing the violation occurred before that effective date.

^{[1] The suspension on early termination is set to end on February 10, 2025, when the new HSR rules take effect.}

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