The past two weeks have been quite busy in the world of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15 U.S.C. § 18a) (HSR). First, on January 7, 2025, the Federal Trade Commission (FTC) announced a record $5.6 million civil penalty to settle allegations that three oil producers engaged in improper “gun-jumping” when the buyer in a proposed M&A transaction assumed significant operational control over the target before the end of the HSR waiting period. Then, on January 14, 2025, the Department of Justice filed the largest-ever HSR enforcement action, seeking some $650 million in civil penalties for a private equity firm’s alleged repeated failures to make complete HSR filings as required. Meanwhile, the FTC has begun releasing guidance about the sweeping changes to HSR practice that are slated to take effect on February 10, although these rule changes are being challenged in court, and there is speculation that the new Trump administration might delay their implementation.
Finally, capping off this flurry of activity, on January 22, 2025, the FTC published a Notice in the Federal Register announcing the latest annual adjustments to the reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15 U.S.C. § 18a). These annual adjustments are pegged to changes in gross national product. While the changes to the reporting thresholds are perhaps more mundane than the sweeping rule changes and headline-grabbing HSR enforcement actions of the past two weeks, the annual threshold adjustments have broad applicability to potential filers everywhere. Once the new thresholds come into effect, the HSR size-of-transaction threshold will increase from $119.5 million to $126.4 million. The revised HSR thresholds will apply for transactions that close on or after February 21, 2025.
Separately, on January 22, 2025, the FTC also published a notice in the Federal Register, with the latest annual adjustments to the statutory thresholds under Section 8 of the Clayton Act (15 U.S.C. § 19). The revised Section 8 thresholds are effective immediately.
Size-of-Transaction Test
(Original: $50 Million; New as of February 21, 2025: $126.4 Million)
This size-of-transaction threshold currently is $119.5 million, based upon the 2024 annual adjustment. On February 21, 2025, however, this threshold will increase to $126.4 million. Accordingly, for transactions that close on or after February 21, 2025, no HSR filing will be required unless the acquisition will result in the acquiring person holding an aggregate total amount of voting securities, non-corporate interests, and/or assets of the acquired person in excess of $126.4 million.
Size-of-Person Test
(Original: $10 Million/$100 Million; New as of February 21, 2025: $25.3 Million/$252.9 Million)
Under the new adjustments, acquisitions valued above $505.8 million will be reportable regardless of the size of the parties. Acquisitions valued at greater than $126.4 million but less than or equal to $505.8 million will be reportable only if the size-of-person test is separately met. The revised thresholds adjust the size-of-person test so that it will be met if (i) either the acquiring or acquired person has total assets or annual net sales of $252.9 million or more and (ii) the other person has total assets or, in certain situations, annual net sales of $25.3 million or more.
Notification Thresholds for Acquisitions of Voting Securities
For acquisitions of voting securities, an acquiring person files for the highest applicable notification threshold among five choices. Acquiring 50 percent or greater of an issuer’s voting securities is the highest threshold, but below that level there are four different tiers for reporting acquisitions of minority interests in voting securities. The notification threshold may determine, for example, whether a subsequent acquisition of additional voting securities in the same issuer will require another HSR filing. The new notification thresholds will be, in ascending order:
- An aggregate total amount of voting securities valued at greater than $126.4 million but less than $252.9 million;
- An aggregate total amount of voting securities valued at $252.9 million or greater but less than $1.264 billion;
- An aggregate total amount of voting securities valued at $1.264 billion or greater;
- Twenty-five percent of an issuer’s outstanding voting securities, if valued at greater than $2.529 billion; and
- Fifty percent of an issuer’s outstanding voting securities, if valued at greater than $126.4 million.
Filing Fee Thresholds
In accordance with the significant filing fee changes under the Merger Filing Fee Modernization Act of 2022, the FTC’s January 22, 2025, Federal Register notice announcing the latest annual adjustments to the HSR statutory thresholds also announced the first-ever annual adjustments to the HSR filing fees. The new filing fees as of February 21, 2025, based on the dollar value of the transaction as determined in accordance with the HSR rules, are:
| Size of Transaction | New Filing Fee as of February 21 |
| Less than $179.4 million | $30,000 |
| $179.4 million or more, but less than $555.5 million | $105,000 |
| $555.5 million or more, but less than $1.111 billion | $265,000 |
| $1.111 billion or more, but less than $2.222 billion | $425,000 |
| $2.222 billion or more, but less than $5.555 billion | $850,000 |
| $5.555 billion or more | $2,390,000 |
The new filing fees are subject to an annual increase each fiscal year, based on the percentage increase, if any, in the consumer price index if the percentage increase is one percent or more. The transaction size thresholds are subject to annual adjustment each fiscal year, based on changes in gross national product.
Additional Considerations
For purposes of disclosing past asset acquisitions for Item 8 of the HSR form and for analyzing a potential past failure to file under HSR, it still is necessary to look at the thresholds that were in place at the time of the prior acquisition. It remains important for parties to be careful in determining if a threshold is met, given that the process can be complex, the rules are highly technical, and failure to comply with HSR can result in significant civil penalties. The maximum civil penalty is currently $51,744 for each day of noncompliance, but this maximal penalty is slated to increase from annual indexing in the coming weeks.
Interlocking Directorates Thresholds
(Original: $10 Million; New as of January 22, 2025: $51,380,000)
Finally, in a separate Federal Register notice, the FTC updated the jurisdictional threshold for interlocking directorates under Section 8 of the Clayton Act (Section 8). Section 8 prohibits, subject to certain exceptions, persons from serving as an officer or director of two competing corporations (a practice known as “interlocking”), provided that each corporation has “capital, surplus, and undivided profits” above the statutory threshold. The 1990 amendments to Section 8 set this threshold at $10 million, but based on the latest annual adjustment, the threshold has changed to $51.38 million.
Section 8 also has three safe harbor exceptions. One exception states that Section 8 does not apply if the competitive sales of either interlocked corporation are less than $1 million in 1989 dollars, as adjusted annually. This safe harbor has been adjusted to $5.138 million, based on the new thresholds.
As we have highlighted in previous articles, Section 8 of the Clayton Act is increasingly becoming a focus for FTC and Department of Justice antitrust enforcement. Therefore, companies should continue to monitor their officer and director ranks to ensure that they remain compliant with Section 8.
If you have questions about these Hart-Scott-Rodino reporting threshold changes, contact any of the authors or your Foley & Lardner attorney.
