On February 1, 2021, the US Federal Trade Commission (FTC) published its annual update to the Hart-Scott-Rodino (HSR) Act thresholds in the Federal Registrar. The HSR Act governs those deals that must be reported to the FTC and the US Department of Justice prior to being consummated.1
Pursuant to the new thresholds, a transaction will be reportable if:
- The transaction value is greater than $368 million (previously $376 million); OR
- (a) The transaction value is greater than $92 million (previously $94 million); AND (b) one party has net sales or total assets of $18.4 million or more (previously $18.8 million); AND (c) a second party has net sales or total assets of $184 million or more (previously $188 million).
The revised thresholds will apply to transactions consummated on or after March 4, 2021.
HSR Act thresholds are tied to gross national product (GNP). Notably, this year’s threshold adjustments represented the first downward revision in the HSR thresholds since 2010, when thresholds decreased about 2.6% across the board reflecting GNP contraction relating to the Great Recession. This year’s decreases of 2.13% across all thresholds were predictable in light of COVID-related declines in GNP. Although the number of HSR reported transactions declined in the first half of 2020, the recent decline in GNP has not appeared to have a lasting impact on HSR filing activity; the number of HSR reported transactions has been at an all-time high. In November 2020, the number of HSR reported transactions was 424—the highest number of filings in any one month since the thresholds first were increased in 2001 and nearly 200 more transactions than reported the previous month (October 2020).2 And the number of filings reported in December 2020 (192) and January 2021 (210) remain at above-average levels; signaling that the US economy is healthier than the decline in thresholds may make it seem.3
HSR Act filing fees are keyed to the value of the transaction and HSR Act thresholds. Accordingly, the HSR Act filing fee tiers also will be revised as follows:
- Filing fee of $45,000 will apply to transactions valued at more than $92 million but less than $184 million (previously more than $94 million but less than $188 million).
- Filing fee of $125,000 will apply to transactions valued at $184 million or more but less than $919.9 million (previously $188 million or more but less than $940.1 million).
- Filing fee of $280,000 will apply to transactions valued at $919.9 million or more (previously $940.1 million or more).
Updates also were published for certain HSR exemptions, thresholds for Interlocking Directorates under Section 8 of the Clayton Act (published on January 21, 2021, in the Federal Registrar) and the daily penalty for HSR Act violations (announced by the FTC on January 11, 2021).
To help navigate the complex HSR Act rules, Mayer Brown has created an interactive presentation that provides quick and practical HSR guidance. Based on current 2021 FTC thresholds, this presentation allows you to choose the criteria that best apply to your organization or transaction and then takes you through a basic analysis of whether an HSR Act filing is necessary.
The FTC’s Federal Register notice and a complete list of all HSR threshold adjustments can be found on the FTC’s website.
Access the Mayer Brown Presentation
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2 See “2020: Remote work with real results,” Blog Post by Ian Connor, Bureau of Competition, Federal Trade Commission, https://www.ftc.gov/news-events/blogs/competition-matters/2021/01/2020-remote-work-real-results.
3 Compare “HSR Transactions by Month,” https://www.ftc.gov/enforcement/premerger-notification-program (showing number of reported HSR transactions for December 2020 and January 2021), with “Hart-Scott-Rodino Annual Report, Fiscal Year 2019,” at 24, https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-bureau-competition-department-justice-antitrust-division-hart-scott-rodino/p110014hsrannualreportfy2019_0.pdf (showing number of reported HSR transactions by month for January and December 2019, the last year for which data is available).