FTC Announces Decreased HSR Thresholds for 2021

Healthcare Alert

Firm Alert

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The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) requires that parties to mergers, acquisitions, or other transactions of a certain size notify the Federal Trade Commission (FTC) and the Department of Justice (DOJ) prior to consummation. Each year, the FTC amends the thresholds that trigger this premerger notification requirement to reflect changes in the gross national product.

On February 2, the FTC announced its annual adjustments to the HSR Act filing thresholds for deals signed in 2021. For the first time in recent memory, these new thresholds have been adjusted downward, representing a 2.2% decrease from the 2020 thresholds and demonstrating the grave economic toll of the coronavirus pandemic. The new thresholds will be effective March 4, 2021, 30 days following publication in the Federal Register.

The new filing thresholds are as follows:

  • Size of Transaction Test - The new thresholds require a filing where the purchase price or fair market value of the assets being acquired is at least $92 million, down from $94 million in 2020.
  • Size of Parties Test - One transacting party is also now required to have assets or annual revenues of $184 million (down from $188 million in 2020), and the other party must have assets or annual revenues of $18.4 million or more (down from $18.8 million). In the event that the size of the transaction exceeds $368 million (down from $376 million), the parties must submit an HSR filing regardless of the size of their assets or annual revenues.
  • Filing Fee Thresholds - The required HSR filing fees remain unchanged, but applicable fees will be based on the new thresholds. Going forward, transactions valued:
    • Between $92 million and $184 million (down from between $94 million and $188 million) are subject to a $45,000 filing fee;
    • Between $184 million and $919.9 million (down from $188 million and $940.1 million) carry a fee of $125,000; and
    • Greater than $919.9 million (down from $940.1 million) now require a $280,000 filing fee.

Civil Penalties - In addition to the changes in the filing thresholds, the FTC has increased the maximum civil penalty for HSR Act violations to $43,792 per day, up from $43,280 per day in 2020. Unlike HSR filing thresholds, civil penalty adjustments are tied to annual inflation changes rather than gross national product.