The FTC adjusts the thresholds annually, consistent with changes to gross national product.
On January 24, 2021, the Federal Trade Commission (FTC) announced increases to the jurisdictional thresholds for premerger notification under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). The FTC adjusts the thresholds annually, consistent with changes to gross national product. The announced changes will apply to transactions closing on or after February 23, 2022, which is 30 days after the revised thresholds were published in the Federal Register.
Pursuant to the revised thresholds, transactions valued equal to or in excess of $101 million (up from $92 million) are reportable under the HSR Act, absent exemption, if the “size of persons” test is met. In most transactions, the size-of-persons test is met if one “person” in a transaction has total assets or annual sales in excess of $202 million (up from $184 million) and another “person” in the transaction has total assets or annual sales in excess of $20.2 million (up from $18.4 million). A “person” includes an acquired or acquiring entity, its ultimate parent entity and all entities controlled by the ultimate parent entity. Transactions valued in excess of $403.9 million (up from $368.0 million) will be subject to filing requirements absent exemption regardless of whether the size-of-persons test is met.
HSR Act Penalties Increase
The FTC also separately announced that the maximum civil penalty amount for violations of the HSR Act will increase from $43,792 to $46,517 per day effective January 10, 2022, the date of publication in the Federal Register. The new penalty levels apply to civil penalties assessed after the effective date of the adjustment, including civil penalties whose associated violation predated the effective date.
What This Means for Businesses
The question of whether a business transaction meets the jurisdictional thresholds for premerger notification under the HSR Act depends on the facts and circumstances in each case. The outcome of that question can have significant consequences for the parties to the transaction. Some types of transactions have special size-of-person rules, and additional matters must be considered in analyzing any potential exemptions.
For More Information
If you have any questions about this Alert, please contact Edward G. Biester III, Sean P. McConnell, Nathan Heeter, any of the attorneys in our Antitrust and Competition Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.