FTC Revises Merger Filing Fees and Jurisdictional Thresholds for HSR Act and Corporate Interlocks
On January 22, 2024, the Federal Trade Commission announced revised jurisdictional thresholds and a revised filing fee schedule under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”). Also in January, the FTC also announced revised jurisdictional thresholds for Section 8 of the Clayton Act (“Corporate Interlock Statute”).
Under the revised jurisdictional thresholds, the “size-of-transaction” increased from $111.4 million to $119.5 million, and HSR filing fees for the largest transactions will increase from to $2.25 million to $2.335 million. The revised jurisdictional thresholds and filing fee schedule will become effective on March 6, 2024. The revisions to the corporate interlock thresholds became effective on January 22, 2024 upon publication in the Federal Register.
The FTC also revised the maximum civil penalty for HSR Act violations from $50,120 per day to $51,744 per day, effective January 10, 2024.
REVISED HSR JURISDICTIONAL THRESHOLDS
The FTC is required to adjust the jurisdictional thresholds annually, based on changes in the gross national product. Under the revised HSR thresholds, unless covered by an exemption, HSR filings and waiting periods are required for transactions valued in excess of the $119.5 million "size-of-transaction" threshold involving parties with annual net sales or total assets meeting the "size-of-persons" threshold of $23.9 million or more and $239 million or more. In addition, if the size-of-transaction will exceed $478 million, HSR filings are required regardless of the size-of-persons.
A complete list of the revised jurisdictional thresholds is set out below.
| ORIGINAL THRESHOLDS | 2023 THRESHOLDS | ADJUSTED THRESHOLDS | |
| Size of Transaction1 | $50 million $200 million |
$111.4 million $445.5 million |
$119.5 million $478 million |
| Size of Persons2 | $10 million $100 million |
$22.3 million $222.7 million |
$23.9 million $239 million |
| Notification Thresholds3 | $50 million $100 million $500 million 25% of stock over $1 billion 50% of stock over $50 million |
$111.4 million $222.7 million $1.1137 billion $2.2274 billion $111.4 million |
$119.5 million $239 million $1.195 billion $2.39 billion $119.5 million |
REVISED MERGER FILING FEES
The FTC is required to revise the HSR filing fees annually based on the percentage increase, if any, in the consumer price index for the year then ended over the level established for the year ending September 30, 2022.
A complete list of the revised filing fee thresholds is set out below.
| TRANSACTION VALUES | FILING FEE |
| Greater than $119.5 million but less than $173.3 million | $30,000 |
| At least $173.3 million but less than $536.5 million | $105,000 |
| At least $536.5 million but less than $1.073 billion | $260,000 |
| At least $1.073 billion but less than $2.146 billion | $415,000 |
| At least $2.146 billion but less than $5.365 billion | $830,000 |
| $5.365 billion or more | $2,335,000 |
The FTC is required to publish the adjusted filing fee amounts not later than January 31 of each year.
CORPORATE INTERLOCK THRESHOLDS
Under the revised corporate interlock thresholds, one person may not serve simultaneously as an officer or director of competing corporations if each “interlocked” corporation has capital, surplus, and undivided profits aggregating more than $48,559,000. The threshold amount applicable to the statutory “safe harbor” based on the dollar value of “competitive sales” has also been revised: a corporate interlock does not violate the statute if the “competitive sales” of either interlocked corporation are less than $4,855,900. The statutory safe harbors based on ratios of “competitive sales” to total sales remain unchanged.
REVISED CIVIL PENATLY
On January 11, 2024, the FTC announced an increase in the maximum civil penalty for HSR Act violations from $50,120 to $51,744 per day. The new penalties became effective January 10, 2024. The FTC adjusts the civil penalty annually for inflation. The increased maximum penalty will apply to civil penalties assessed after the effective date of the adjustment, including for violations that predated the effective date.
1Size-of-Transaction: HSR notifications may be required if an acquiring person, as a result of an acquisition, will hold assets, voting securities, and/or non-corporate interests valued at more than $50 million, as adjusted.
2Size-of-Persons: Generally, one “person” to the transaction must have at least $10 million, as adjusted, in annual net sales or total assets, and the other “person” must have at least $100 million, as adjusted, in annual net sales or total assets. Transactions valued in excess of $200 million, as adjusted, are not subject to the size-of-persons threshold and are reportable unless exempt.
3Notification Thresholds: HSR notifications are generally required for transactions that will exceed a notification threshold where the size-of-persons threshold is met or does not apply, unless exempt.
ABOUT BAKER BOTTS L.L.P.
Baker Botts is an international law firm whose lawyers practice throughout a network of offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit bakerbotts.com.
