Federal Trade Commission Increases Hart-Scott-Rodino Thresholds

January 24, 2022

The Federal Trade Commission announced on January 24 that it will increase the Hart-Scott-Rodino Act jurisdictional and filing fee thresholds. Any transaction closing on or after February 23, 2022 will be subject to the revised thresholds.

The new rules include an increase in the “size of transaction” test from transactions valued at more than $92 million to transactions valued at more than $101 million—which means that, under the new threshold, acquisitions valued for Hart-Scott-Rodino Act (HSR Act) purposes at more than $101 million may require preclosing filing and approval.

New Jurisdictional Thresholds

As a general rule, the HSR Act requires both “Acquiring Persons” and “Acquired Persons” (as defined in the HSR Act) to file notifications if the following post-adjustment jurisdictional thresholds are met:

One person has net sales or total assets of at least $20.2 million;
The other person has net sales or total assets of at least $202 million; and
As a result of the transaction, the Acquiring Person will hold stock and/or assets of the Acquired Person valued at more than $101 million; or
As a result of the transaction, the Acquiring Person will hold stock and/or assets of the Acquired Person valued at more than $403.9 million, regardless of the sales or assets of the Acquiring and Acquired Persons.

Conditions 1 and 2 are generally referred to as the “size of person” test, while conditions 3 and 4 are commonly described as the “size of transaction” test.

The HSR Act rules relating to acquisitions of partnership interests and membership interests in a limited liability company (LLC) remain the same. Only acquisitions of economic control in an LLC or partnership may be reportable. “Control” is defined as having a right to 50% or more of the profits of a partnership or LLC, or 50% or more of the assets upon the dissolution of such entity.

New Filing Fee Thresholds

Filing fees are also determined by a threshold test relating to the size of the transaction. While the valuation thresholds have changed, the fees themselves have not been adjusted:

Valuation of Transaction	Filing Fee
In excess of $101 million, but less than $202 million	$45,000
$202 million or more, but less than $1.0098 billion	$125,000
$1.0098 billion or more	$280,000

The figures above represent the new “as adjusted” threshold figures. The table below illustrates the changes.

Current Threshold (in millions)	“As Adjusted” Threshold (in millions)
$18.4	$20.2
$92	$101
$184	$202
$368	$403.9
$919.9	$1,009.8

These changes are being implemented pursuant to the 2000 amendments to Section 7A of the Clayton Antitrust Act. Section 7A(a)(2) of the Clayton Antitrust Act requires the Federal Trade Commission to revise the jurisdictional thresholds annually, based on the change in gross national product, in accordance with Section 8(a)(5). The revised thresholds will apply to all transactions that close on or after February 23, 2022.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

New York
Stacey Anne Mahoney
Harry T. Robins
Susan Zhu
Luisa Di Lauro

Washington, DC
David R. Brenneman
Ryan M. Kantor
Bernard W. Archbold
Y. Frank Ren
Damos Anderson

London
Omar Shah
Frances Murphy

Brussels
Izzet Sinan
Christina Renner

Frankfurt
Michael Masling