On January 26, 2018, the US Federal Trade Commission (FTC) announced annual revisions to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act) notification thresholds. Under the HSR Act, parties to certain transactions are required to make notification filings and observe a statutorily prescribed waiting period (usually 30 days) prior to consummating such transactions. The changes increase the minimum value of a transaction that could trigger an HSR filing with the FTC and the Antitrust Division of the US Department of Justice. The FTC is required by law to revise the notification thresholds annually, based on the change in gross national product.
As a result of the changes, transactions valued at less than $84.4 million will not require an HSR filing. Transactions valued at between $84.4 million and $337.6 million will require an HSR filing if the parties meet the “size-of-parties” test and if no exemptions are available. Under the “size-of-parties” test, an HSR filing is required if one party has sales or assets of at least $168.8 million and the other party has sales or assets of at least $16.9 million. Lastly, transactions valued at greater than $337.6 million will require an HSR filing without regard to the size of the parties.
Below is a list of the various changes to the HSR thresholds:
- Size-of-Transaction Threshold: changed from $80.8 million to $84.4 million
- Size-of-Parties Thresholds: changed from $16.2 million to $16.9 million, and from $161.5 million to $168.8 million
- Size-of-Parties Valuation “Cap”: changed from $323.0 million to $337.6 million
- Filing Fee Thresholds: changed from $80.8 million to $84.4 million, from $161.5 million to $168.8 million, and from $807.5 million to $843.9 million
- Filing Fees: unchanged from $45,000, $125,000, and $280,000
- Maximum Civil Penalty for Violations: changed from $40,654 per day to $41,484 per day
Any person who fails to comply with the HSR Act, including but not limited to consummating a reportable transaction without observing the filing requirements, may be subject to a civil penalty for each day during which such person is in violation. The changes were published in the Federal Register on January 29, 2018 and will become effective on February 28, 2018. The new thresholds apply to transactions closed on or after the effective date.