2020 Increases to HSR Act Thresholds
On January 28, 2020, 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 (see attached Federal Register publication). The revised thresholds will become effective February 27, 2020. However, please note that if a transaction is entered into prior to February 27, 2020, the new thresholds will still apply to the transaction as long as it closes on or after February 27, 2020.
As a brief background summary, under the HSR Act, the FTC and Department of Justice must be notified before mergers, acquisitions and other transactions that meet certain monetary thresholds are consummated. Once the parties have filed their HSR Act Notification and Report Forms, the enforcement agencies have up to 30 days 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. 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. Failure to file an HSR Act Notification and Report Form is subject to a statutory penalty of up to $40,000 per day (as adjusted to $43,280 for 2020) for noncompliance.
The new thresholds will increase the minimum value of a transaction that could trigger an HSR Act filing as follows:
Size of Transaction
|Transaction Value||HSR Act Filing Required?|
|$94 million or less (from 2019 threshold of $90 million)||No|
|More than $94 million up to $376 million (from 2019 threshold of $359.9 million)||Only if size-of-person test is met (see below)|
|More than $376 million (from 2019 threshold of $359.9 million)||Yes|
Size of Person
Total assets or annual net sales of
|Adjusted 2020 Threshold|
|Acquiring/acquired person||$180 million||$188 million|
|Other person||$18 million||$18.8 million|
Although the filing fee itself has not changed, the new filing-fee thresholds will also take effect on the effective date and will apply to transactions filing an HSR Act Notification and Report Form on or after the effective date. For transactions that have been signed but have not closed yet, the applicable filing-fee thresholds are those in effect at the time of filing the HSR Act Notification and Report Form.
|Transaction Value||Filing Fee|
|More than $94 million but less than $188 million||$45,000|
|$188 million but less than $940.1 million||$125,000|
|$940.1 million or more||$280,000|
Releases: Revised Jurisdictional Thresholds