New HSR thresholds and filing fees for 2024

Each year, the Commission adjusts the minimum dollar jurisdictional thresholds that determine reportability under the Hart-Scott-Rodino Act based on the change in gross national product in the prior year. The 2023 Consolidated Appropriations Act created new filing fee tiers with new filing fees and the thresholds for these filing fees, as well as the fee amounts, are also adjusted annually along with the jurisdictional thresholds.

The Commission recently announced the updated jurisdictional thresholds and the updated fee schedule, both of which will become effective on March 6, 2024. 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. They should also help parties determine the correct filing fee.

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 2024, that threshold will be $119.5 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. For example, a deal valued at $115 million which will close on or after March 6, 2024, is not reportable because it is below the new minimum size of transaction threshold, even though it exceeds the current threshold of $111.4 million.

Here are the new jurisdictional thresholds, effective on March 6, 2024:

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. Here are the new filing fee thresholds, as well as the adjusted fee amounts, revised in accordance with the 2023 Consolidated Appropriations Act and effective on March 6, 2024:

Rule 3: Notification thresholds for subsequent purchases adjust yearly, too.

The HSR Rules contain additional notification thresholds that relieve parties of the burden of making another filing every time additional voting shares of the same person are acquired. So, 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.

Here’s how this works. If you file on February 10, 2024, for a $120 million voting securities acquisition that will close after March 6, 2024, you should file to cross the $119.5 million threshold because that is the $50 million (as adjusted) threshold in effect at the time of closing (See Rule 1) and pay a $30,000 fee, the filing fee in effect at the time you file. You then have one year from the end of the waiting period to cross the $119.5 million threshold, even though the $50 million (as adjusted) threshold may be higher next year when the thresholds adjust again.

The next relevant threshold is the “$100 million (as adjusted)” threshold (so called because it started as $100 million and is now adjusted annually). So, after the end of the waiting period for the filing to cross the $119.5 million threshold, you then have five years to acquire up to the next notification threshold -- in this case, the $100 million (as adjusted) threshold -- without an additional HSR filing. In each subsequent year of the five-year period under Section 802.21, that threshold will adjust and you always look to the revised threshold in effect at the time. The revised $100 million (as adjusted) threshold for 2024 will be $239 million, but in 2025, it will likely be higher and you would look to the higher 2025 figure for evaluating additional acquisitions at that time.

As always, contact the PNO with specific questions regarding the HSR rules.