FTC Announces New Increased HSR Filing Thresholds for 2023

On January 23, 2023, the Federal Trade Commission (FTC) published new, higher notification thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). The HSR Act requires the FTC to adjust the thresholds annually to reflect changes in U.S. gross national product. The new reporting thresholds will likely go into effect in late February, thirty days after their publication in the Federal Register. HSR Filing fees will also increase for certain large transactions.

Under the new thresholds, the minimum “size of transaction” threshold will become $111.4 million, up from $101 million, representing an increase of 11.28% over 2022. Transactions resulting in aggregate holdings of voting securities, assets, or non-corporate interests exceeding this threshold will be reportable to the U.S. antitrust authorities, unless otherwise exempt. The new thresholds are as follows: 

The FTC also revised the HSR filing fees and fee thresholds, as required by the 2023 Consolidated Appropriations Act signed into law on December 29, 2022(as further explored in our recent client alert). Under the new legislation, filing fees will increase substantially for certain large transactions, as follows:

The Act also requires the FTC to adjust filing fees annually based on increases in the U.S. consumer price index, as determined by the Department of Labor.

HSR Notification Thresholds Overview

The HSR Act requires premerger notification of transactions that satisfy the “size of transaction” and “size of person” tests and are not otherwise exempt. The thresholds are adjusted annually to reflect changes in U.S. gross national product. The new thresholds will likely become at the end of February and be applicable through the next annual adjustment expected in Q1 2023.

Size of Transaction Test

Under the new thresholds, the size of transaction test will be met if, as a result of a transaction, the acquiring person at the ultimate parent entity (UPE) level will hold aggregate voting securities, assets, or non-corporate interests of the acquired person valued at more than $111.4 million. For transactions valued at more than $111.4 million but $445.5 million or less, the parties must also meet the size of person test. Transactions valued at more than $445.5 million will be reportable regardless of the size of the parties, unless an exemption applies.

Size of Person Test

Under the new thresholds, where it applies, the size of person test will generally be satisfied where one party to the transaction at the UPE level has total assets or annual net sales of $222.7 million or more and the UPE of the other party has total assets or annual net sales of $22.3 million or more.

Revised Thresholds for Interlocking Directorates

The FTC also announced revised thresholds relating to Section 8 of the Clayton Act. Section 8 prohibits interlocking directorates in which one “person” serves simultaneously as an officer or director of two or more competing corporations, subject to certain exceptions. Under the revised thresholds, Section 8 may apply when each of the competing corporations has capital, surplus, and undivided profits aggregating more than $45,257,000 and each corporation’s competitive sales are at least $4,525,700.