FTC Announces Increases to Hart-Scott-Rodino Act Notification Thresholds, Filing Fees, and Civil Penalty Amounts

HSR Thresholds Increased

The Federal Trade Commission (“FTC”) announced that for all transactions closing on or after February 27, 2023, the thresholds that determine whether the parties must submit a pre-closing notification to the FTC and the Antitrust Division of the Department of Justice (“DOJ”) will increase by approximately 10%. The new thresholds mean that unless otherwise exempted, pre-closing notifications required by the Hart-Scott-Rodino Act (“HSR Act”) must be filed where either (a) the acquiring person will hold more than $111.4 million of the acquired person’s voting securities, non-corporate interests or assets as a result of the acquisition and the size-of-person thresholds are met, or (b) the acquiring person will hold more than $445.5 million of the acquired person’s voting securities, non-corporate interests or assets as a result of the acquisition, regardless of whether the size-of-person thresholds are met.

The size-of-person thresholds were increased to $222.7 million and $22.7 million. This means that for transactions above the $111.4 million size-of-transaction threshold, HSR pre-closing notifications are required (unless otherwise exempted) for transactions where one ultimate parent entity to the transaction has annual net sales or total assets of $222.7 million or more and the other has annual net sales or total assets of $22.7 million or more. As noted above, the size-of-person thresholds do not apply where the size of the transaction is over $445.5 million.

When pre-closing notification is required under the HSR Act, the parties must wait 30 days after submitting the notification before consummating the transaction. The waiting period can be extended if the FTC or DOJ request additional information about the transaction (commonly referred to as a “Second Request”).

New HSR Filing Fee Structure

The FTC also announced a new HSR fee structure, effective February 27, 2023, based on the size of the transaction. This fee structure change, mandated by the Merger Filing Fee Modernization Act passed by Congress on December 23, 2022, lowers the filing fees (starting at $30,000) for smaller transactions but increases fees (up to $2,250,000) for larger transactions. These fees may now be adjusted annually based on the consumer price index. Under the HSR Act, the acquiring person is responsible for paying these fees, however, parties may agree to share responsibility for payment.

Civil Penalties Increased

The FTC also announced an increase in the maximum civil penalty amounts for violations under the HSR Act from $46,517 per day to $50,120 per day, effective January 11, 2023.

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You can download a quick reference for these new thresholds and filing fee structure here. Determining whether a filing is required and, if so, what the filing fee may be requires an understanding of the detailed HSR rules and agency interpretations. Consult with counsel for advice on whether your transaction may be subject to the HSR Act and to discuss whether your deal may present other antitrust risks. For more information on HSR or other antitrust issues please contact Howard Iwrey (248-203-0526, hiwrey@dykema.com), Cody Rockey (734-214-7655, crockey@dykema.com), or your Dykema relationship attorney.