The US Federal Trade Commission (FTC) approved new pre-merger notification thresholds and revised HSR filing fees under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR). The FTC annually reviews HSR thresholds and filing fees based on changes in the gross national product and the consumer price index. The new thresholds and filing fees will take effect 30 days after their publication in the Federal register and are expected to come into force from February 23, 2024.
Transaction size threshold
The minimum "deal size" threshold for acquisitions of voting securities, non-corporate interests or assets will increase from $111.4 million to $119.5 million.
Person size thresholds
Acquisitions with a total value added greater than $119.5 million (up from $111.4 million) but less than $478 million (up from $445.5 million) are potentially reportable only if the โsize of personโ threshold is met. . The โperson sizeโ threshold is met if one party to the transaction has annual net sales or total assets of at least $239 million (up from $222.7 million) and the other party has annual net sales or total assets of at least $23.9 million (up from $22.3 million).
Reportability thresholds for acquisitions of voting securities
Acquisitions of less than 50% of an issuer's voting stock may trigger an HSR filing when the acquirer's total holdings of the issuer cross one of several reportability thresholds, assuming the Share Size threshold is met. Person (where applicable) and no exemption applies.1 These thresholds have been increased as follows:
- aggregate holdings of voting securities of an issuer valued at more than $119.5 million but less than $239 million
- aggregate holdings of voting securities of an issuer valued at $239 million or more, but less than $1,195 million
- aggregate holdings of voting securities of an issuer valued at $1.195 billion or more
- 25% of an issuer's outstanding voting securities if the holdings are valued at more than $2.39 billion
- 50% of an issuer's outstanding voting securities if the holdings are valued at more than $119.5 million
|
Threshold description |
Current threshold for 2023 |
New threshold for 2024 |
|
Transaction size |
$111.4 million |
$119.5 million |
|
person size |
22.3 million dollars |
$23.9 million |
|
person size |
$222.7 million |
$239 million |
|
person size |
$445.5 million |
$478 million |
|
Reportability threshold for an acquisition of voting securities |
$1,117.3 billion |
$1.195 billion |
|
Reportability threshold for an acquisition of voting securities |
$2.2274 million |
$2.390 billion |
New filing fee amounts
The FTC also announced new filing fee amounts, which are now:
|
Transaction value |
Filing fee 2024 |
|
$119.5 million to < $173.3 million |
$30,000 |
|
$173.3 million to < $536.5 million |
$105,000 |
|
$536.5 million to < $1,073 million |
$260,000 |
|
1,073 million dollars < 2,146 million dollars |
$415,000 |
|
2,146 million dollars < 5,365 million dollars |
$830,000 |
|
$5.365 billion or more |
$2,335,000 |
FTC Reviews Clayton Act Section 8 Thresholds for Interlocking Addresses
The FTC also revised the thresholds for interconnected addresses under Section 8 of the Clayton Act. Section 8 prohibits, with certain exceptions, a person from serving as a director or officer of two competing corporations if two thresholds are met. Section 8 applies if each competing corporation has capital, surplus and undivided profits of more than $10 million, but not if the competitive sales of either corporation are less than $1 million. These amounts are subject to annual review; after last year's review, they were $45,257,000 and $4,525,700, respectively. The new thresholds, effective January 22, 2024, are $48,559,000 and $4,855,900, respectively. He Federal register You can find a notice about the revised Section 8 thresholds. here.
FTC Reviews Maximum Civil Penalty Amount for HSR Violations
Finally, the FTC has announced the annual increase in the maximum civil penalty amount for HSR violations, raising the amount from $50,120 per day to $51,744 per day. The new maximum applies to civil penalties imposed on or after January 10, 2024, even when the underlying violation preceded that date. He Federal register You can find a notice about the revised civil penalty amount. here.
1 Acquisitions of less than 50% of an unincorporated entity do not require an HSR filing if the acquirer will own less than 50% of the (i) earnings and (ii) assets of the entity at the time of dissolution.
