On Feb. 2, 2021, the Federal Trade Commission announced the 2021 adjusted thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), which decreased on a year-over-year basis for the first time since 2010. The HSR Act notification requirements apply to transactions that satisfy the specified “size of transaction” and “size of person” dollar thresholds. These thresholds, however, change from year to year. The HSR Act requires an annual threshold adjustment based on changes in the U.S. gross national product for each fiscal year. The newly announced 2021 thresholds are expected to become effective March 4, 2021 (30 days following publication in the Federal Register), and will be applicable until recalculated in early 2022.
The key HSR Act threshold adjustments are summarized in the following chart, which are lower for 2021 than in 2020:
|
Test
|
2020 Threshold
|
2021 Adjusted Threshold
|
|
Size of Transaction
|
$94.0 million
|
$92.0 million
|
|
Size of Party (lower)
|
$18.8 million
|
$18.4 million
|
|
Size of Party (higher)
|
$188.0 million
|
$184.0 million
|
|
Size of Transaction Where Size of Party Threshold Is Not Relevant
|
$376.0 million
|
$368.0 million
|
The “size of transaction” threshold is determined based on the value of voting securities, non-corporate interests and/or assets held as a result of the transaction. Under the new 2021 thresholds, there will be no HSR Act notification requirements for transactions valued at less than $92.0 million (down from $94.0 million in 2020).
The “size of parties” thresholds will decrease to $18.4 million (in annual sales) and $184.0 million (in total assets), from $18.8 million and $188.0 million in 2020, respectively. If the ultimate parent entities of one or both parties to the transaction do not satisfy the applicable “size of parties” thresholds, there is no HSR Act notification required for transactions valued at more than $92.0 million but not more than $368.0 million. Conversely, transactions valued at more than $368.0 million (down from $376.0 million in 2020) will be reportable in 2021 regardless of the size of the parties, unless an HSR Act exemption applies.
The underlying HSR Act filing fees remain unchanged, but the applicable filing fee will be based on the new thresholds, as follows:
|
Amount of the Filing Fee
|
Size of Transaction
|
|
$45,000
|
Greater than $92.0 million but less than $184.0 million
|
|
$125,000
|
$184.0 million or greater but less than $919.9 million
|
|
$280,000
|
$919.9 million or greater
|
Finally, the FTC also increased the maximum civil penalty for violations of the HSR Act to $43,792 per day (from $43,280 per day), effective on publication in the Federal Register.
As always, the value of a transaction is subject to certain exceptions and calculation adjustments that can affect either the obligation to make a notification filing or the amount of the filing fee required with the filing. If you have any questions regarding the matters covered in this alert, please contact Allen Grunes, Gino Maurelli, Matthew Nyberg or your regular Brownstein Hyatt Farber Schreck contact.