The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act) requires that certain mergers, acquisitions, and joint ventures be cleared by the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) if they exceed certain valuation and monetary thresholds. If your transaction exceeds the HSR thresholds, and therefore requires antitrust scrutiny, this can materially alter the structure and timing of the proposed transaction.
Pursuant to the HSR Act, the FTC is required annually to revise the HSR thresholds based on the change in the U.S. gross national product. On February 1, 2021, the FTC announced the new HSR thresholds, each taking effect 30 days following publication. The new HSR thresholds (and corresponding old HSR thresholds) are:
|
Test |
2020 Threshold |
2021 Threshold |
|
Size-of-Transaction |
$94 million |
$92 million |
|
Size-of-Person |
$18.8 million for one party; and $188 million for the other party |
$18.4 million for one party; and $184 million for the other party |
|
Size-of-Transaction at which Size-of-Person Test No Longer Applies |
$376 million |
$368 million |
The FTC and DOJ can investigate a transaction even if the various HSR thresholds are not met and no report to the FTC or DOJ is required. Accordingly, should your transaction valuation come close to the applicable HSR threshold or otherwise take place within a highly concentrated industry, an antitrust legal risk assessment should be one of the first actions taken.
If you have questions about whether the new HSR thresholds impact your transaction or conducting an antitrust legal risk assessment, please contact Dave Shafer, the author of this blog, or a member of PilieroMazza’s Business & Transactions Group or Mergers & Acquisitions Team.