Adjusted threshold for size-of-transaction test
The minimum value of a transaction that could trigger an HSR filing will increase from $90 million to $94 million.
| Value of transaction |
HSR filing requireed? |
| $94 million or less |
No |
| More than $94 million, up to $375 million |
Only if size-of-person test met (see below)
|
More than $376 million
|
Yes |
For any agreement entered into prior to the effective date (February 27), the new thresholds will apply so long as the transaction is closed on or after the effective date.
Adjusted threshold for size-of-person test
The following table reflects the new annual thresholds for the size-of-person test. For transactions valued at more than $94 million, up to $376 million, an HSR filing is only required if the size-of-person test is met.
|
Original threshold |
2020 indexed threshold |
| Total assets or annual net sales of acquiring/acquired person |
$100 million |
$188 million |
| Total assets or annual net sales of other person |
$10 million
|
$18.8 million |
Filing fee thresholds
The new thresholds do not change the HSR filing fee amounts, but the applicable filing fee will be based on the new thresholds as of February 27. For transactions that are imminent or are currently underway, the applicable filing fee thresholds are those in effect at the time of filing notification.
| Value of transaction |
Filing fee |
| More than $94 million but less than $188 million |
$45,000 |
| $188 million or more but less than $940.1 million |
$125,000
|
$940.1 million or more
|
$280,000 |
Civil penalties
On January 13, 2020, the FTC announced that the maximum civil penalty amount for HSR Act violations will increase to $43,280 per day, effective as of the date of publication in the Federal Register (January 14, 2020).
Non-reportable and cleared transactions
Noncompliance with the HSR Act carries serious penalties, but the fact that a transaction does not meet HSR filing thresholds does not mean that such transaction is immune from scrutiny by antitrust enforcers, nor does the fact that a transaction has received HSR clearance to close. The Antitrust Division of the Department of Justice and the FTC have previously filed suits seeking to unwind consummated mergers, including mergers that had received HSR clearance. Enforcers have also challenged transactions well below the threshold for the size-of-transaction test, including those with a purchase price of less than $10 million.
Given the complexities and nuances in this area of the law, it is always wise to consult with experienced antitrust counsel regarding HSR filing obligations and substantive antitrust issues in connection with transactions of all sizes. In 2019, Reed Smith's antitrust and competition team provided advice and counseling related to more than 75 transactions on both the buy and sell side. To learn more about our experience, please contact any member of Reed Smith's antitrust and competition team.
Client Alert 2020-034
