• HSR Transaction and Filing Fee Thresholds Adjusted
  • January 26, 2011 | Authors: Barry J. Brett; Mitchell P. Portnoy
  • Law Firms: Troutman Sanders LLP - New York Office ; Troutman Sanders LLP - Washington Office
  • The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”) requires parties to stock and asset transactions that satisfy specified jurisdictional thresholds to provide the Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”) with information used to evaluate whether to raise antitrust objections to the proposed transaction. The parties must wait a designated period of time (usually 30 calendar days) after providing that information before the proposed transaction can close. The FTC and DOJ frequently grant requests to terminate the waiting period early (particularly where there are no substantive antitrust concerns), and also can extend the waiting period (as part of a so-called “second request”).

    The FTC has announced the most recent adjustments to those HSR jurisdictional thresholds. These adjustments will be effective late-February 2011, and will apply to all transactions that close on or after that effective date. The exact effective date is not yet set.

    When HSR was adopted in 1976, its jurisdictional thresholds, though set to capture relatively large transactions, were never indexed for inflation. As a result, by the late 1990’s smaller and smaller transactions were subject to HSR compliance. Congress fixed this problem as part of a broader amendment to HSR, effective February 1, 2001. That legislation also directed the FTC to adjust the various HSR jurisdictional thresholds for inflation, annually, beginning in 2005. This new adjustment represents the FTC’s seventh annual adjustment.


    Summary of Adjustments to HSR Jurisdictional Tests

    HSR Test

    Old Threshold

    New Threshold

    Size-of-Parties
    Larger Party:
    Smaller Party:

    $126.9 million
    $12.7 million

    $131.9 million
    $13.2 million

    Size-of-Transaction

    $63.4 million

    $66.0 million

    Size-of-Transaction
    Above Which No Size-of-Parties Test

    $253.7 million

    $263.8 million

    The basic HSR jurisdictional tests were restated as part of the legislation effective February 1, 2001. Transactions are reportable if three distinct tests (commerce test, size-of-transaction test, and size-of-parties test) are satisfied and no exemption applies. Once these latest adjustments go into effect, the size-of-transaction test will be satisfied if the transaction has a value (as determined under HSR) in excess of $66.0 million (up from $63.4 million); and, if the size-of-transaction exceeds $263.8 million (up from $253.7 million), the transaction could be reportable whether or not the size-of-parties test is satisfied. Where the size-of-parties test does apply, it would be satisfied, in general, where one “person” (as determined under HSR) has worldwide annual net sales or worldwide total assets of $131.9 million (up from $126.9 million), and the other person $13.2 million (up from $12.7 million).

    The FTC also is adjusting the corresponding thresholds, based on the value of the transaction, used to determine the applicable HSR filing fee (the filing fees themselves are unchanged):

    Summary of Adjustments to HSR Filing Fee Thresholds

    HSR Filing Fee

    Old Threshold
    (Value of Transaction)

    New Threshold
    (Value of Transaction)

    $45,000

    Less than $126.9 million

    Less than $131.9 million

    $125,000

    Less than $634.4 million

    Less than $659.5 million

    $280,000

    $634.4 million or more

    $659.5 million or more