2022 Increases to HSR Act Thresholds
On January 24, 2022, the Federal Trade Commission (“FTC”) published a notice in the Federal Register announcing the annual changes to the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the “HSR Act”) pre-merger notification thresholds (see linked Federal Register publication below). The thresholds for 2022 increased by 9.78% from the 2021 amounts, based on the change in gross national product during 2021.
The revised thresholds will apply to any transaction that closes on or after February 23, 2022. If a transaction closes before February 23, 2022 the current 2021 thresholds will continue to apply.
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? |
|
$101 million or less (from 2021 threshold of $92 million) |
No |
|
More than $101 million up to $403.9 million (from 2021 threshold of $368 million) |
Only if size of person test is met (see below) |
|
More than $403.9 million (from 2021 threshold of $368 million) |
Yes |
Size of Person
Total assets or annual net sales of acquiring/acquired person
2021 Threshold: $184 million
Adjusted 2022 Threshold: $202 million
Total assets or annual net sales of other person
2021 Threshold: $18.4 million
Adjusted 2022 Threshold: $20.2 million
Filing Fee
Although the filing fee itself has not changed, the new filing-fee thresholds will also take effect on February 23, 2022 and will apply to transactions filing an HSR Act Notification and Report Form on or after that date. For transactions that have been signed but have not yet closed, the applicable filing-fee thresholds are those in effect at the time of filing the HSR Act Notification and Report Form.
Transaction Value and Filing Fees
More than $101 million but less than $202 million - Filing Fee $45,000
$202 million but less than $1.0098 billion - Filing Fee $125,000
$1.0098 billion or more - Filing Fee $280,000
Civil Penalty
The FTC also recently announced an increase in the maximum daily civil penalty for violations of the HSR Act from $43,792 per day to $46,517 per day (see linked Federal Register publication). This change became effective on January 10, 2022 when it was published in the Federal Register. This change will only apply to penalties that are assessed after January 10, 2022, even if the actions causing the violation occurred before that effective date.
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. 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.
Releases: Revised Jurisdictional Thresholds and Adjustment to Civil Penalty Amounts