Updates to HSR Reporting Thresholds and Merger Filing Fees Announced for 2025

By Miranda Miller and John Jo

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) requires parties to transactions meeting certain size thresholds to make notification filings with the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice and to observe a waiting period before closing. On January 10, 2025, the FTC announced revisions to the reporting thresholds under HSR. Each year, adjustments to the HSR reporting and exemption thresholds are made based on annual changes in the Gross National Product.

The revised thresholds will become effective on February 21, 2025, and will apply to any transaction that will close on or after that date.

HSR applies to acquisitions of assets, voting securities and non-corporate interests (such as LLC membership interests) and may also apply to the formation of joint ventures, corporations and non-corporate entities (such as LLCs or limited partnerships). The FTC views certain grants of an exclusive license under intellectual property rights as an acquisition of assets that would be subject to the HSR filing requirements.

Revised HSR Reporting Thresholds

Under the new thresholds:

• The basic HSR threshold applicable to most acquisitions is $126.4 million (up from $119.5 million).
• Transactions valued in excess of $126.4 million but not in excess of $505.8 million (up from $478 million) are reportable if (i) the ultimate parent entity of one party to the transaction, together with all entities it controls, has sales or assets of at least $25.3 million (up from $23.9 million) and (ii) the ultimate parent entity of the other party, together with all entities it controls, has sales or assets of at least $252.9 million (up from $239 million). If the acquired person is not “engaged in manufacturing,” the threshold is not met unless that person has at least $25.3 million in total assets or $252.9 million in annual net sales.
• Transactions valued in excess of $505.8 million (up from $478 million) are reportable without regard to the size of the parties.

Even if a transaction is reportable based on these thresholds, it may qualify for an exemption from the HSR filing requirements, including exemptions available for certain acquisitions of non-US assets and voting securities.

HSR Filing Fees

HSR filing fees will also increase for any transaction closing on or after February 21, 2025. The new filing fees will be as follows:

• $30,000 for transactions valued above $126.4 million but less than $179.4 million.
• $105,000 for transactions valued at or above $179.4 million but less than $555.5 million.
• $265,000 for transactions valued at or above $555.5 million but less than $1.111 billion.
• $425,000 for transactions valued at or above $1.111 billion but less than $2.222 billion.
• $850,000 for transactions valued at or above $2.222 billion but less than $5.555 billion.
• $2.39 million for transactions valued at or above $5.555 billion.

Filing fees are increased annually by an amount equal to the percentage increase, if any, in the consumer price index, as determined by the Department of Labor or its successor, for the year then ended over the level established for the year ending September 30, 2022. The FTC publishes annual adjusted amounts no later than January 31 of each year.

Penalty For Failure to Make an HSR Filing

Companies and individuals considering transactions should seek legal advice to determine if an HSR filing is required. Complex rules govern transaction valuation and the availability of exemptions under HSR. Failure to make a required HSR filing before closing violates federal law and can subject parties to civil penalties that are currently $51,744 per day for each day of noncompliance (penalties are adjusted for inflation each year and are anticipated to be adjusted upward in early 2025). Penalties can also be imposed on parties who submit incomplete filings, even if the filing was made on time.

If you have questions about the new HSR thresholds or how to apply HSR to a specific transaction, please contact Miranda Miller, John Jo or the Smith Anderson lawyer with whom you currently work.