Each year, the Commission adjusts the minimum jurisdictional dollar thresholds that determine reportability under the Hart-Scott-Rodino Act based on the change in gross national product from the prior year. The Consolidated Appropriations Act of 2023 created new filing fee tiers with new filing fees and the thresholds for these filing fees, as well as the fee amounts, are also adjusted annually along with the jurisdictional thresholds.
The Commission recently announced the Updated jurisdictional thresholds and updated fee schedule., which will come into effect on March 6, 2024. The following general rules should help parties determine the relevant thresholds and any resulting reporting obligations that apply based on when the filing is made, when it is closed the transaction and when the thresholds are adjusted. . They should also help the parties determine the correct filing fee.
Rule 1: The correct threshold for determining reportability is the one in effect at the time of closing.
The most important threshold for determining reportability is the minimum transaction size. This is often referred to as the โ$50 million (as adjusted)โ threshold because it started at $50 million and is now adjusted annually. By 2024, that threshold will be 119.5 million dollars. To determine the reportability of a deal that will close around the time the new threshold takes effect, look at what the $50 million threshold will be (as adjusted). at the time of closing. For example, a deal valued at $115 million that will close on or after March 6, 2024 cannot be reported because it is below the new minimum transaction size threshold, even though it exceeds the current threshold of $111.4 million. Dollars.
These are the new jurisdictional thresholds, effective as of March 6, 2024:
|
ORIGINAL THRESHOLD |
ADJUSTED THRESHOLD |
|
$10 million |
$23.9 million |
|
$50 million |
$119.5 million |
|
$100 million |
$239 million |
|
$110 million |
$262.9 million |
|
$200 million |
$478 million |
|
$500 million |
$1.195 billion |
|
billion dollars |
$2.390 billion |
Rule 2: The filing fee is determined by the value of the transaction at the time of filing.
If you determine that a transaction is reportable, the filing fee must be based on the current filing fee threshold. at the time of presentation. These are the new filing fee thresholds, as well as adjusted fee amounts, revised in accordance with the Consolidated Appropriations Act of 2023 and effective March 6, 2024:
|
PRESENTATION FEE |
TRANSACTION SIZE |
|
$30,000 |
less than $173.3 million |
|
$105,000 |
not less than $173.3 million but less than $536.5 million |
|
$260,000 |
not less than 536.5 million dollars but less than 1,073 million dollars |
|
$415,000 |
not less than 1,073 million dollars but less than 2,146 million dollars |
|
$830,000 |
not less than 2,146 million dollars but less than 5,365 million dollars |
|
$2,335,000 |
5,365 million dollars or more |
Rule 3: Notification thresholds for subsequent purchases are also adjusted annually.
The HSR Rules contain additional notification thresholds that relieve parties of the burden of making another filing each time additional voting shares are acquired from the same person. So, when the HSR notification is filed, the acquiring person has one year from the end of the waiting period to cross the threshold set out in their HSR filing. Under Section 802.21, you must cross the threshold established in the filing within one year after the end or termination of the waiting period, or you will have to file a new HSR notification to cross that threshold. Section 802.21 also specifies that once the requested waiting period expires or expires, you may purchase up to the next threshold for the next five years without reapplying.
Is that how it works. If you file on February 10, 2024 for a $120 million acquisition of voting securities that will close after March 6, 2024, you must file to cross the $119.5 million threshold because that is the threshold of $50 million (as adjusted) in effect at that time. closing (see Rule 1) and pay a fee of $30,000, the filing fee in effect at the time you file. You then have one year from the end of the waiting period to cross the $119.5 million threshold, although the $50 million threshold (as adjusted) may be higher next year when the thresholds are adjusted again.
The next relevant threshold is the โ$100 million (adjusted)โ threshold (so called because it started out as $100 million and is now adjusted annually). So, after the end of the waiting period for filing to cross the $119.5 million threshold, you have five years to vest up to the next notification threshold - in this case, the $100 million threshold (as adjusted) - without an additional HSR presentation. In each subsequent year of the five-year period under Section 802.21, that threshold will be adjusted and you will always take into account the revised threshold in effect at that time. The revised $100 million (adjusted) threshold for 2024 will be $239 million, but in 2025 it will likely be higher and the higher 2025 figure would be sought to evaluate additional acquisitions at that time.
As usual, contact the PNO with specific questions about the HSR rules.
