Insights
FTC announces 2023 thresholds under HSR Act and Clayton Act
Jan 24, 2023The Federal Trade Commission announced the annual revised thresholds for merger notifications under the Hart Scott-Rodino Antitrust Improvements act of 1976, as amended (“HSR Act”). The thresholds are revised annually based on changes in U.S. gross national product. The new thresholds (“2023 Thresholds”) will become effective 30 days after publication in the Federal Register, which is expect in the next few days. The 2023 Thresholds will be applicable through the next annual adjustment expected in January 2024.
HSR Act - 2023 Thresholds
The HSR Act requires premerger notification of transactions that satisfy the “size of transaction” and “size of person” tests and are not otherwise exempt.
Size of Transaction – 2023 Threshold
Under the 2023 Thresholds, the size of transaction primary notification threshold will be met if, as a result of a transaction, the acquiring person at the ultimate parent entity (“UPE”) level will hold aggregate voting securities, assets, or non-corporate interests of the acquired person valued at more than $111.4 million.
For transactions valued at more than $111.4 million but less than or equal to $445.5 million, the parties must also meet the size of person test. Transactions valued at more than $445.5 million will be reportable regardless of the size of the parties, unless an exemption applies.
Size of Transaction |
||
|
|
Current (2022) |
Revised (2023) |
|
Primary Notification Threshold |
$101 million |
$111.4 million |
|
Alternative Notification Threshold |
$403.9 million |
$445.5 million |
Size of Person – 2023 Threshold
Under the 2023 Thresholds, the size of person test will be satisfied where one party to the transaction at the UPE level has total assets or annual net sales of $222.7 million or more and the UPE of the other party has total assets or annual net sales of $22.3 million or more.
Size of Person |
|
|
Current (2022) |
Revised (2023 Thresholds) |
|
$20.2 million |
$22.3 million |
|
$202 million |
$222.7 million |
Summary
|
Value of transaction |
HSR Filing Required? |
|
$111.4 million or less |
No |
|
More than $111.4 million, but less than or equal to $445.5 million |
Only if size of person thresholds met |
|
More than $445.5 million |
Yes |
HSR Filing Fees
The 2023 Thresholds do not affect the filing fees due under the HSR Act, as recently amended by the Consolidated Appropriations Act, 2023 – detailed on our post 'Significant Changes to U.S. Premerger Filing Fees under the Consolidated Appropriations Act 2023'. However, filing fees will be based on the 2023 thresholds as follows:
|
Revised |
Transaction Valued At |
New Filing Fee |
|
More than $111.4 million, but less than $161.5 million |
$30,000 |
|
|
$161.5 million or more, but less than $500 million |
$100,000 |
|
|
$500 million or more, but less than $1 billion |
$250,000 |
|
|
$1 billion or more, but less than $2 billion |
$400,000 |
|
|
$2 billion or more, but less than $5 billion |
$800,000 |
|
|
$5 billion or more |
$2,250,000 |
The filing fees will become effective 30 days from publication in the Federal Register, which is expected this week.
2023 Updates to Civil Penalties
The FTC also recently announced increases to the maximum civil penalty amount for violations of the HSR Act from $46,517 to $50,120 per day, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. These adjustments took effect January 11, 2023.
Related Practice Areas
-
M&A & Corporate Finance
