The Hart-Scott-Rodino (HSR) Act requires parties to transactions that meet certain thresholds to notify the Department of Justice (DOJ) and Federal Trade Commission (FTC) and observe a waiting period prior to closing unless certain exemptions apply. These thresholds are adjusted annually based on U.S. economic growth. This year, HSR thresholds will significantly increase.
The revised thresholds, which will become effective on February 27, 2023, are:
Size-of-Transaction Test: The threshold used in the size-of-transaction test will increase from $101.0 million to $111.4 million.
Size-of-Persons Test: The sales and assets thresholds used in the size-of-persons test will increase from $20.2 million to $22.3 million and from $202.0 million to $222.7 million, respectively. The size-of-transaction threshold above which the size-of-persons test no longer applies will increase from $403.9 million to $445.5 million.
Greater Notification Thresholds: These thresholds, which apply to subsequent acquisitions of voting securities made within five years after expiration or termination of the waiting period of a previous HSR filing for an acquisition of voting securities from the same issuer, were revised as follows:
|Previous Threshold||Revised Threshold|
|$202.0 million||$222.7 million|
|$1,009.8 million||$1,113.7 million|
|25% of voting securities if valued at greater than $2,019.6 million||25% of voting securities if valued at greater than $2,227.4 million|
|50% of voting securities if valued at greater than $101 million||50% of voting securities if valued at greater than $111.4 million|
Penalty for HSR Violations: The maximum daily civil penalty for HSR violations is also annually adjusted. The maximum daily penalty for HSR violations has increased from $46,517 to $50,120.
HSR Filing Fees Substantially Increased
Filing Fee Thresholds: In addition, the FTC announced the implementation date of a new HSR filing fee structure. This new filing fee structure was authorized by a law Congress passed in December 2022, the Merger Filing Fee Modernization Act. Under this new law, HSR filing fees substantially increase for most sizes of transactions – with nearly a $2 million increase for the largest deals. HSR filing fees will be reduced by $10,000 for the smallest deals.
The new HSR filing fee structure will be effective on February 27, 2023. The filing fee thresholds, which continue to be based on the value of the assets or equity being acquired, will be revised as follows:
|Current Filing Fee Structure||Filing Fee Structure Effective as of Feb. 27, 2023|
|Value of Transaction||Filing Fee||Value of Transaction||Filing Fee|
|$101.0 million to $202.0 million||$45,000||less than $161.5 million||$35,000|
|$202.0 million to $1,009.8 million||$125,000||$161.5 million to $500 million||$100,000|
|$500 million to $1 billion||$250,000|
|$1,009.8 million or more||$280,000||$1 billion to $2 billion||$400,000|
|$2 billion to $5 billion||$800,000|
|$5 billion or more||$2,250,000|
If you have any questions about the HSR thresholds for 2023, please contact the authors.