FTC Increases HSR Notification Thresholds for 2022

On January 21, 2022, the Federal Trade Commission (“FTC”) announced annual revisions for premerger filings required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). The HSR Act generally requires parties to transactions—e.g., mergers, joint ventures, acquisitions of assets or voting securities—that meet certain thresholds to file premerger notifications with both the FTC and the United States Department of Justice (“DOJ”), and observe a statutory waiting period prior to closing. The FTC revises the notification thresholds annually based on changes in the gross national product (“GNP”).  The newly announced thresholds will take effect on February 23, 2022.  The FTC also slightly raised maximum civil penalties for HSR Act noncompliance.

Size-of-Transaction Thresholds

For 2022, the size-of-transaction notification thresholds will increase as indicated below.  Importantly, unless otherwise exempted, acquisitions that will result in the acquiring person holding more than $101 million of the acquired person’s voting securities, assets, or non-corporate interests, will require an HSR filing (assuming the size-of-person thresholds are also met).  As detailed further below, required filing fees will vary between $45,000 and $280,000 depending on the size of the transaction.

2021 Threshold	2022 Threshold
$92 million	$101 million
$184 million	$202 million
$919.9 million	$1.0098 billion

The size-of-transaction test will be met if, as a result of the transaction, the acquiring party’s aggregate holdings in the acquired party (as calculated under the HSR Act) will exceed any one of the notification thresholds. A proposed transaction that satisfies the size-of-transaction test may require an HSR notification if the size-of-person test (discussed below) is also met and no exemptions apply.

Size-of-Person Thresholds

For 2022, the size-of-person notification thresholds will increase as follows:

2021 Threshold	2022 Threshold
$18.4 million	$20.2 million
$184 million	$202 million

The size-of-person test will be 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. The size-of-person test need not be met, however, if the total value of the proposed transaction exceeds $403.9 million (this is an increase from the 2021 threshold of $368 million).

Filing Fees and Penalties

The filing fees required in connection with an HSR notification will not change in 2022, and will remain set at $45,000 for transactions valued above the first tier of $101 million but less than the second tier of $202 million; $125,000 for transactions valued at $202 million or more but less than $1.0098 billion; and $280,000 for transactions valued at or above $1.0098 billion.

The FTC separately announced on January 6, 2022 that the maximum civil penalties for failure to comply with the notification and waiting period requirements of the HSR Act will increase from $43,792 to $46,517 per each day of non-compliance.  These new penalties took effect on January 10, 2022.

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.

If you have any questions regarding the HSR Act, including whether or not a contemplated transaction will require an HSR notification, please contact Richard B. Walsh, Jr., David W. Brown, Oliver H. Thomas, Sarah A. Milunski, or a member of our Antitrust Practice Group.