The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), as amended, requires all persons contemplating certain mergers or acquisitions that meet or exceed the jurisdictional thresholds (shown below) to file a premerger notification (an “HSR Filing”) with the Federal Trade Commission (“FTC”) Premerger Notification Office and Department of Justice (“DOJ”) Antitrust Division and to wait a period of time before consummating the transaction.
Each fiscal year, the jurisdictional filing thresholds are adjusted to reflect the percentage change in the gross national product. The FTC published the new jurisdictional filing thresholds on January 22, 2024. These changes will become effective 30 days after being published in the Federal Register.
Filing Thresholds
Parties must analyze their transactions against the “Size of Transaction” and “Size of Person” reporting thresholds. The “Size of Transaction” test is concerned with the value (through voting securities, NCI, assets or a combination thereof being transferred) of what is being acquired whereas the “Size of Person” test generally measures a company based on its last regularly prepared annual statement of income and expenses and its last regularly prepared balance sheet. To determine whether an HSR Filing is needed, parties should analyze the transaction utilizing the following steps.
- Will an acquiring person hold an aggregate amount of voting securities and assets less than $119.5 million? If yes, then no HSR Filing is needed. If no, move to Step 2.
- Will an acquiring person hold in excess of $119.5 million but not in excess of $478 million? If yes, then move to Step 3. If no, then move to Step 4.
- Does one person in the transaction have sales or assets of at least $23.9 million? If yes, then an HSR Filing is needed. If no, then no HSR Filing is needed.
- Will an acquiring person hold in excess of $478 million? If yes, then an HSR Filing is needed.
For purposes of this analysis, the value of any assets under consideration is the fair market value of the entity’s non-cash assets without regard to whether those assets are subject to a mortgage or how the assets might have depreciated for accounting purposes. The table below summarizes the 2024 reporting thresholds under the HSR Act.
| Filing Required | 2023 Threshold | 2023 Threshold | |
| Size of Transaction Test | No | X ≤ $111.4 million | X ≤ $119.5 million |
| Size of Transaction Test
AND Size of Person Test |
Yes | $111.4 million < X ≤ $445.5 million
AND Person 1: ≥ $22.3 million Person 2: ≥ $222.7 million |
$119.5 million < X ≤ $478 million
AND Person 1: ≥ $23.9 million Person 2: ≥ $239 million |
| Size of Transaction Test | Yes | X > $445.5 million | X > $478 million |
Filing Fee
In connection with an HSR Filing, the acquiring person must pay a filing fee at the time of filing by electronic wire transfer. Consistent with the Merger Filing Fee Modernization Act which restructured the filing fee thresholds for 2023, the 2024 filing fee structure features six tiers. The filing fee thresholds for 2024 can be seen below, with the thresholds from 2023 for comparison.
| Value of Holding Securities and Assets to Be Held | Fee Amount |
| 2023 Threshold | |
| $111.4 million < X < $161.5 million | $30,000 |
| $161.5 million < X < $500 million | $100,000 |
| $500 million < X < $1 billion | $250,000 |
| $1 billion < X < $2 billion | $400,000 |
| $2 billion < X < $5 billion | $800,000 |
| X ≥ $5 billion | $2,250,000 |
| Value of Holding Securities and Assets to Be Held | Fee Amount |
| 2024 Threshold | |
| $119.5 million < X < $173.3 million | $30,000 |
| $173.3 million < X < $536.5 million | $105,000 |
| $536.5 million < X < $1.073 billion | $260,000 |
| $1.073 billion < X < $2.146 billion | $415,000 |
| $2.146 billion < X < $5.365 billion | $830,000 |
| X ≥ $5.365 billion | $2,335,000 |
The new filing fees are subject to their own annual adjustment, with the fees increased by an amount equal to the percentage increase in the Consumer Price Index, if any, over the previous year’s established level.
Penalty
Any person (or officer, director or partner) who fails to notify the FTC and DOJ of a reportable transaction faces a civil penalty of $51,744 for each day of noncompliance.
If you have any questions or would like additional information about this topic, please contact one of the following members of Hall Render’s Antitrust Practice Group:
- William Berlin at (202) 370-9582 or wberlin@hallrender.com;
- Michael Greer at (317) 977-1493 or mgreer@hallrender.com;
- John Bowen at (317) 429-3629 or jbowen@hallrender.com;
- Nathan Chubb at (202) 780-2991 or nchubb@hallrender.com;
- Hannah Clarke at (317) 429-3615 or hclarke@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
