The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), as amended, requires all persons contemplating certain mergers or acquisitions that meet or exceed the jurisdictional thresholds (shown below) to file a premerger notification (an “HSR Filing”) with the Federal Trade Commission (“FTC”) Premerger Notification Office and Department of Justice (“DOJ”) Antitrust Division and to wait a period of time before consummating the transaction.
Each fiscal year, the jurisdictional filing thresholds are adjusted to reflect the percentage change in the gross national product. The FTC announced the new jurisdictional filing thresholds on January 24, 2022. These changes will become effective 30 days after being published in the Federal Register.
Filing Thresholds
Parties must analyze their transactions against the “Size of Transaction” and “Size of Person” reporting thresholds. The “Size of Transaction” test is concerned with the value (through voting securities, NCI, assets or a combination thereof being transferred) of what is being acquired whereas the “Size of Person” test generally measures a company based on its last regularly prepared annual statement of income and expenses and its last regularly prepared balance sheet. To determine whether an HSR Filing is needed, parties should analyze the transaction utilizing the following steps:
- Will an acquiring person hold an aggregate amount of voting securities and assets less than $101 million? If yes, then no HSR Filing is needed. If no, move to Step 2.
- Will an acquiring person hold in excess of $101 million but not in excess of $403.9 million? If yes, then move to Step 3. If no, then move to Step 4.
- Does one person to the transaction have sales or assets of at least $20.2 million? If yes, then an HSR Filing is needed. If no, then no HSR Filing is needed.
- Will an acquiring person hold in excess of $403.9 million? If yes, an HSR Filing is needed.
For purposes of this analysis, the value of any assets under consideration is the fair market value of the entity’s non-cash assets without regard to whether those assets are subject to a mortgage or how the assets might have depreciated for accounting purposes. The table below summarizes the 2022 reporting thresholds under the HSR Act:
| Filing Required | 2021 Threshold | 2022 Threshold | |
|
Size of Transaction Test |
No | X ≤ $92 million | X ≤ $101 million |
|
Size of Transaction Test
AND
Size of Person Test |
Yes | $92 million < X ≤ $368 million
AND
Person 1: ≥ $18.4 million Person 2: ≥ $184 million |
$101 million < X ≤ $403.9 million
AND
Person 1: ≥ $20.2 million Person 2: ≥ $202 million |
| Size of Transaction Test | Yes | X > $368 million | X > $403.9 million |
Filing Fee
In connection with an HSR Filing, the acquiring person must pay a filing fee at the time of filing by electronic wire transfer. The amount of the filing fee depends upon the size of the transaction as follows:
| Value of Holding Securities and Assets to Be Held | Fee Amount | |
| 2021 Threshold | 2022 Threshold | |
| $92 million < X < $184 million |
$101 million < X < $202 million
|
$45,000 |
| $184 million < X < $919.9 million |
$202 million < X < $1.0098 billion
|
$125,000 |
| X ≥ $919.9 million |
X ≥ $1.0098 billion
|
$280,000 |
Penalty
Any person (or officer, director or partner) who fails to notify the FTC and DOJ of a reportable transaction faces a civil penalty of $46,517 for each day of noncompliance.
If you have any questions or would like additional information about this topic, please contact one of the following members of Hall Render’s Antitrust Practice Group:
- Nathan Chubb at (202) 780-2991 or nchubb@wp.hallrender.com;
- William Berlin at (202) 370-9582 or wberlin@wp.hallrender.com;
- Michael Greer at (317) 977-1493 or mgreer@wp.hallrender.com;
- John Bowen at (317) 429-3629 or jbowen@wp.hallrender.com; or
- Your primary Hall Render contact.
Special thanks to Hannah Clarke, law clerk, for her assistance with the publication of this article.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
