The Federal Trade Commission (FTC) has once again announced an increase in threshold for determining if a transaction will need to file for antitrust clearance under Hart-Scott-Rodino (HSR), the U.S. antitrust regime.
The size-of-the transaction test, which is one of the main measurements parties to M&A transactions must consider to determine if an HSR filing is required, has been raised to a threshold of $111.4 million for 2023 from the 2022 threshold of $101 million. Furthermore, the size-of-person thresholds, which is also an important prong for filing determinations, have been raised from $20.2 million to $22.3 million and from $202 million to $222.7 million, respectively. These increases coupled with transaction values shrinking due to high interest rates and a lack of debt funding will likely allow many transaction that would have triggered an antitrust filing in the past few years to slip through under the limit.
Another notable change the FTC announced is a significant increase in the filing fees. The previous three-level structure of filing fees has been expanded to six levels. The new filing fees range from a minimum fee of $30,000 for transactions under $161.5 million to a high fee of $2.25 million for transactions valued at more than $5 billion (with intervals of $100,000, $250,000, $400,000 and $800,000 in fees in between). The increase in fees at the high end from a prior cap of $280,000 in fees to a new cap of $2.25 million is a massive increase at the top of the spectrum and is intended to generate additional fees for the FTC to employ in enforcing antitrust regulations.
The changes, which you can read in more detail on the FTC announcement linked below, will become effect on February 27, 2023.