Adjusted threshold for the size-of-transaction test
The minimum value of a transaction that could trigger an HSR filing will increase from $101 million to $111.4 million.
For any agreement entered into prior to the effective date (30 days after publication in the Federal Register), the new thresholds will apply so long as the transaction is closed on or after the effective date.
Adjusted threshold for the size-of-person test
The following table reflects the new annual thresholds for the size-of-person test. For transactions valued at more than $111.4 million and up to $445.5 million, an HSR filing is only required if the size-of-person test is met.
Filing fee thresholds
For the first time in 20 years, the FTC also approved changes to the HSR filing fee structure, which will become effective 30 days after publication in the Federal Register. For transactions that are imminent or currently underway, the applicable filing fee thresholds are those in effect at the time of filing notification.
Interlocking directorate thresholds
The FTC also recently announced revised thresholds that trigger prohibitions on certain interlocking memberships on competing corporate boards of directors. As of January 20, 2023, this prohibition does not apply if either competitor corporation has capital, surplus, and undivided profits totaling below $45,257,000, or if the competitive sales of either corporation are less than $4,525,700, among other exceptions.
On January 6, 2023, the FTC announced that the maximum civil penalty amount for HSR Act violations will increase from $46,517 to $50,120 per day, effective as of the date of publication in the Federal Register (January 11, 2023).
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 a transaction is immune from scrutiny by antitrust enforcers. Also, the fact that a transaction has received HSR clearance to close does not mean it will avoid the scrutiny of enforcers. 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 clearance following antitrust review. 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 that the FTC has dramatically increased its enforcement of the antitrust laws in recent years, and the complexities and nuances in this particular 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.
Client Alert 2023-024