On Feb. 15, the Federal Trade Commission announced revised thresholds for pre-merger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). These thresholds determine whether companies are required to notify federal antitrust authorities about a transaction.
The new thresholds — which are expected to be published in the Federal Register the week of Feb. 18, 2019, to take effect 30 days after their publication — are as follows:
- The “size of transaction” test has increased to $90 million. Therefore, to qualify as a potentially reportable transaction under the HSR Act, a buyer must, as a result of the transaction, hold voting securities or assets valued in excess of $90 million.
- The “size of person” tests have increased to $18 million and $180 million, respectively. Unless the acquired or acquiring person has annual net sales or total assets of at least $18 million, and the other person has annual net sales or total assets of $180 million, the transaction often will not be reportable.
- Transactions in excess of $359.9 million are now reportable even if the “size of person” test is not met.
HSR Act filing fees remain unchanged, but the thresholds used to calculate the fees have increased as follows:
- An acquisition with a value of $90 million, up to $180 million, requires a filing fee of $45,000.
- An acquisition with a value of $180 million, up to $899.8 million, requires a filing fee of $125,000.
- An acquisition with a value of $899.8 million or more requires a filing fee of $280,000.
Additionally, on Feb. 14, 2019, the FTC announced an increase in the maximum civil penalty amount for violations of the HSR Act from $41,484 to $42,530 per day.
McGuireWoods’ Antitrust & Trade Regulation Department has substantial experience in mergers and acquisitions, and its lawyers can assist you in determining how these new rules will affect the reportability of any potential transaction under the HSR Act.