When Congress passed the Hart-Scott-Rodino Antitrust Improvements Act of 1976, it created minimum dollar thresholds to limit the burden of premerger reporting. In 2000, it amended the HSR statute to require the annual adjustment of these thresholds based on the change in gross national product. As a result, reportability under the Act changes from year to year as the statutory thresholds adjust. The PNO fields many questions about the upcoming adjustments to the HSR thresholds from parties whose transactions may take place around the time of the revisions. The Commission recently announced the revised thresholds, which will become effective on February 23, 2022. The following rules of thumb should help parties determine the relevant thresholds and any resulting reporting obligations that apply based on when the filing is made, when the transaction closes, and when the thresholds adjust.
Rule 1: The correct threshold for determining reportability is the one in effect at the time of closing.
The most significant threshold in determining reportability is the minimum size of transaction threshold. This is often referred to as the “$50 million (as adjusted)” threshold because it started at $50 million and is now adjusted annually. For 2022, that threshold will be $101 million. To determine reportability for a deal that will close around the time that the new threshold is effective, look to what the $50 million (as adjusted) threshold will be at the time of closing.
Rule 2: The filing fee is determined by the value of the transaction at the time of filing.
If you determine that a transaction is reportable, the filing fee should be based on the filing fee threshold that is in effect at the time of filing. Note that the filing fees themselves do not change, only the thresholds for calculating the correct fee. Here are the new filing fee thresholds, effective on February 23, 2022:
valued in excess of $101 million but less than $202 million
valued at $202 million or greater but less than $1.0098 billion; or
valued at $1.0098 billion or greater
Rule 3: Notification thresholds for subsequent purchases adjust yearly, too.
When HSR notification is filed, the acquiring person has one year from the end of the waiting period to cross the threshold stated in its HSR filing. Under Section 802.21, you must cross the threshold stated in the filing within one year after the end or termination of the waiting period, or you will have to file a new HSR notification in order to cross that threshold. Section 802.21 also specifies that once the filed-for waiting period ends or terminates, you can acquire up to the next threshold over the next five years without filing again.
As always, contact the PNO with specific questions regarding the HSR rules.