FTC Announces 2024 Hart-Scott-Rodino Threshold and Filing Fee Adjustments
Antitrust Alert
The Federal Trade Commission (FTC) has announced the annual revisions to the monetary thresholds that determine whether companies are required to notify federal antitrust authorities about a transaction under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) and the monetary thresholds that trigger prohibitions on certain interlocking directorates under Section 8 of the Clayton Act. The values are adjusted annually based on changes in the U.S. gross national product (GNP). While the FTC has posted the new thresholds and filing fees on its website, the new thresholds and fees become effective 30 days after publication in the Federal Register, which is expected before the end of January. Therefore, the new thresholds and fees will apply to transactions that close after the effective date, which will be in late February.
HSR Revisions
The FTC’s announcement impacts the notification thresholds for premerger notification filings under the HSR Act, as well as certain other values under the HSR Act. The HSR Act requires that acquisitions of voting securities, noncorporate interests, or assets that exceed certain thresholds be disclosed to U.S. antitrust authorities for review before they can be consummated. The “size-of-transaction threshold” requires that the transaction exceeds a certain value. Under certain circumstances, the parties involved also have to exceed “size-of-person thresholds.”
The most important change is that the minimum size-of-transaction threshold will increase from the current $111.4 million to $119.5 million. The size-of-person thresholds will also increase as follows:
- For transactions valued between $119.5 million and $478 million, one party to the transaction must have $23.9 million in sales or assets and the other party must have $239 million in sales or assets, as reported on the last regularly prepared balance sheet or income statement.
- For transactions valued at greater than $478 million, no size-of-person threshold must be met to require an HSR filing.
The monetary thresholds that dictate the required filing fee have similarly increased as follows:
|
Filing Fee |
Size of Transaction |
|
$30,000 |
$119.5 million or greater but less than $173.3 million |
|
$105,000 |
$173.3 million or greater but less than $536.5 million |
|
$260,000 |
$536.5 million or greater but less than $1.073 billion |
|
$415,000 |
$1.073 billion or greater but less than $2.146 billion |
|
$830,000 |
$2.146 billion or greater but less than $5.365 billion million |
|
$2,335,000 |
$5.365 billion or greater |
In addition, the maximum civil penalties for violations of the HSR Act have increased from $50,120 per day to $51,744 per day, effective as of January 10, 2024.
Interlocking Directorates
Section 8 of the Clayton Act generally prohibits one person from serving as a director or officer of two competing corporations if two thresholds are met. One threshold relates to the companies’ profitability, and one relates to the amount of competitive sales between the companies. The statute requires the FTC to revise these thresholds annually, also based on changes to the GNP. Effective as of January 22, 2024, only companies with capital, surplus, and undivided profits aggregating more than $48,559,000 are covered by Section 8(a)(1), and a violation can be found only if the competitive sales of each company are $4,855,900 or greater under Section 8(a)(2)(A).
If you have any questions concerning this briefing, please contact Mike Denniston at mdenniston@bradley.com, Justin Gunter at jgunter@bradley.com or any other member of Bradley’s Antitrust and Competition team.
