On Jan. 10, 2025, the Federal Trade Commission (FTC) announced its annual adjustments to the premerger filing thresholds under the Hart-Scott-Rodino Act (HSR Act) and to the filing fee thresholds under the Merger Filing Fee Modernization Act of 2022. The HSR Act requires parties to mergers that clear certain thresholds to notify the FTC and the Antitrust Division of the U.S. Department of Justice of the transaction and observe a waiting period before closing.
The HSR Act directs the FTC to revise the thresholds governing the size-of-transaction and size-of-person tests each year in accordance with changes in the gross national product. Transactions that meet these two tests (or the size-of-transaction test only for transactions valued above $505.8 million) are reportable under the HSR Act unless an exemption applies.
The 2025 thresholds will take effect 30 days after publication in the Federal Register, which will occur in the coming days. The value of the transaction for purposes of the thresholds is measured at the time of the transaction’s closing. The key threshold values are:
- Transactions valued above $126.4 million will meet the size-of-transaction test. Under this test, a transaction is reportable only if the value of all non-exempt voting securities, noncorporate interests and assets that will be held by the acquiring person as a result of the transaction exceed this threshold.
- The size-of-person test will not apply to transactions valued above $505.8 million. This threshold ensures that the FTC receives notice of large mergers even when the parties do not have assets and/or annual revenues sufficient to satisfy the size-of-person test. Any transaction exceeding this threshold is reportable unless an exemption applies.
- The size-of-person test is met when one party meets a threshold of $252.9 million or more and the other party meets a threshold of $25.3 million or more. A transaction satisfies the size-of-person test when the value of the assets and/or annual revenues of one party exceeds the higher threshold and the value of the assets and/or annual revenues of the other party exceeds the lower threshold, subject to additional criteria set forth in the HSR rules.
The FTC also announced new thresholds for filing fees, which will take effect 30 days after publication in the Federal Register:
While these adjustments impact when a filing is required and the fee to pay with the filing, they do not affect the information submitted for the HSR filing.
As McGuireWoods previously covered, the FTC recently issued a final rule that substantially increases the volume of information and types of documents and data that must be submitted for the HSR filing. This final rule is slated to take effect on Feb. 10, 2025, though litigation filed on Jan. 10, 2025, by the U.S. Chamber of Commerce and other groups may delay the effective date.
