FTC Updates HSR Act Merger Thresholds and Filing Fees for 2025

The FTC is updating HSR Act merger thresholds and filing fees for 2025, raising transaction limits and introducing a new six-tier filing fee structure.

On January 10, 2025, the Federal Trade Commission (FTC) unveiled plans to adjust the thresholds and fees for premerger notifications under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).

This update will reflect new limits on transaction sizes for mergers and acquisitions, as well as an increase in filing fees for larger deals, in accordance with the Merger Filing Fee Modernization Act of 2022.

Revised Transaction Thresholds Under the HSR Act

The new initial threshold for HSR notifications will increase from $119.5 million to $126.4 million.

For transactions valued between $126.4 million and $505.8 million (an increase from the previous $478 million), the size-of-the-person test still applies.

This means that one party must have sales or assets worth at least $252.9 million (up from $239 million), while the other must have sales or assets of at least $25.3 million (previously $23.9 million).

Transactions exceeding $505.8 million will require notification, regardless of the parties’ sizes.

  • Previous Threshold: Transaction size test | Above $119.5 million | Updated Threshold: Above $126.4 million
  • Previous Threshold: Size of person test | $23.9 million / $239 million | Updated Threshold: $25.3 million / $252.9 million
  • Previous Threshold: Transaction value not subject to the size of person test | $478 million | Updated Threshold: $505.8 million

New Filing Fee Structure Under the HSR Act

Below is the revised filing fee schedule, which will apply to transactions closing 30 days or more after publication in the Federal Register:

  • Transaction Size: $126.4 million to $179.4 million | Filing Fee: $30,000
  • Transaction Size: $179.4 million to $555.5 million | Filing Fee: $105,000
  • Transaction Size: $555.5 million to $1.111 billion | Filing Fee: $265,000
  • Transaction Size: $1.111 billion to $2.222 billion | Filing Fee: $425,000
  • Transaction Size: $2.222 billion to $5.555 billion | Filing Fee: $850,000
  • Transaction Size: Over $5.555 billion | Filing Fee: $2,390,000

Updates to Section 8 Thresholds

The FTC has also revised the thresholds concerning interlocking directorates as outlined in Section 8 of the Clayton Act.

These changes will go into effect 30 days after official publication in the Federal Register, anticipated soon.

Section 8 prohibits individuals, including corporate officers and directors, from serving on the boards of competing firms with specific exceptions.

For example, this includes situations where either company has capital, surplus, and undivided profits below $51,380,000 (an increase from $48,559,000) or where one company’s competitive sales are under $5,138,000 (up from $4,855,900).

Additional exemptions exist if competitive sales make up less than 2% of a corporation’s total sales or if each corporation’s competitive sales account for less than 4% of their total sales.

To clarify, “competitive sales” refers to the gross revenues generated from all products and services that one corporation sells in competition with another, based on the most recent fiscal year.

Meanwhile, “total sales” encompasses all gross revenues from products and services sold by a corporation during its latest completed fiscal year.

Source: Natlawreview.com