On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act of 2023. The act includes the Merger Filing Fee Modernization Act, which will adjust filing fees under the Hart-Scott-Rodino ("HSR") Act for the first time since 2001. The new filing fees are expected to go into effect in 2023, although the exact timing has yet to be determined. Filing fees for smaller reportable transactions will slightly decrease. But parties with HSR reporting obligations for transactions valued at or greater than $500 million should generally anticipate significantly increased filing fees going forward. The increased filing fees for larger transactions are intended to increase funding for the Federal Trade Commission ("FTC") and the U.S. Department of Justice ("DOJ") to pursue antitrust investigation and enforcement.
Updated Filing Fees and Size-of-Transaction Thresholds
Once the FTC provides updated guidance on its implementation of the Merger Filing Fee Modernization Act, the size-of-transaction filing fees will change as indicated below. Required filing fees will vary between $30,000 and $2,250,000, depending on the size of the transaction, as also detailed below. Additionally, the act also states that filing fees will increase each year in proportion to increases, if any, in the Consumer Price Index of 1% or more and rounded to the nearest multiple of $5,000.
|
Size-of-Transaction Thresholds (as of December 2022) |
Updated Filing Fees (as of 2023) |
|---|---|
|
Greater than $101 Million but less than $161.5 Million |
$30,000 |
|
At or greater than $161.5 Million but less than $500 Million |
$100,000 |
|
At or greater than $500 Million but less than $1 Billion |
$250,000 |
|
At or greater than $1 Billion but less than $2 Billion |
$400,000 |
|
At or greater than $2 Billion but less than $5 Billion |
$800,000 |
|
At or greater than $5 Billion |
$2,250,000 |
A proposed transaction that meets the size-of-transaction threshold
will likely require an HSR notification if the size-of-person test
is also met and no exemptions apply. As of December 2022, the
size-of-person test is met if one party to the proposed transaction
has assets or annual net sales totaling $202 million or more and
the other party to the proposed transaction has assets or annual
net sales totaling $20.2 million or more. Both the
size-of-transaction thresholds and the size-of-person thresholds
are already subject to annual adjustment under the HSR Act.
Adjustments to these thresholds typically go into effect in the
first quarter of each year.
Conclusion
Determining whether an HSR notification is required in connection with a transaction can be complicated and requires an in-depth understanding of the HSR Act, the implementing regulations, and the applicable exemptions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.