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On January 22, 2024, the Federal Commerce Fee (FTC) launched the revised Hart-Scott-Rodino (HSR) Act jurisdictional thresholds for 2024. The FTC is required by legislation to revise the HSR Act financial jurisdictional thresholds annually based mostly on adjustments within the gross nationwide product. The revised thresholds will grow to be efficient 30 days after discover is printed within the Federal Register and can apply to transactions closing on or after the efficient date. The 2023 thresholds will stay relevant for transactions that shut earlier than the efficient date.
Minimal Submitting Thresholds. Below the HSR Act, 15 U.S.C. §18a, transactions that exceed the “size-of-transaction” threshold and, if relevant, “size-of-person” thresholds should be reported to the FTC and the U.S. Division of Justice earlier than they’ll shut (until an exemption applies). The revised thresholds for 2024 are:
Jurisdictional Take a look at |
2023 |
2024 |
Dimension of Transaction (SOT) |
$111.4 Million |
$119.5 million |
Dimension of Particular person (SOP) |
$22.3 Million |
$23.9 Million |
Massive Transactions—SOP Not Relevant |
$445.5 Million |
$478 Million |
Incremental Submitting Thresholds. HSR filings could also be required not just for preliminary purchases of voting securities valued in extra of the minimal SOT that may set off a submitting ($119.5 million for 2024), but in addition for subsequent purchases of voting securities that exceed incremental SOT thresholds. New HSR filings could also be required for purchases of voting securities that outcome within the buying particular person’s holdings crossing these increased, incremental thresholds, even when an HSR submitting was made for earlier purchases at a decrease threshold. The incremental SOT thresholds for 2024 can be:
- $239 million
- $1.195 billion
- 25 % of the excellent voting securities of an issuer if valued at greater than $2.39 billion1
Notes
- SOT—The transaction measurement is predicated on the whole worth of voting securities, noncorporate pursuits, or belongings to be held by the buying particular person on account of an acquisition.
- The overall worth of voting securities to be held should be based mostly on the present worth of current holdings (“marked to market”) plus the worth of the extra voting securities to be acquired.
- Particular aggregation guidelines apply to acquisitions of noncorporate pursuits and belongings, so please verify along with your antitrust staff relating to these kinds of transactions.
- SOP—When relevant, the SOP is decided by the events’ respective whole belongings or annual internet gross sales. One occasion to the transaction will need to have whole belongings or annual internet gross sales of $239 million and one other occasion to the transaction will need to have whole belongings or annual internet gross sales of $23.9 million. If the goal is the smaller occasion and never engaged in manufacturing, then it will need to have whole belongings of $23.9 million or extra.
- Massive Transactions—If the transaction worth exceeds $478 million, then the SOP thresholds now not apply and a transaction could also be topic to HSR based mostly solely on the worth of voting securities, noncorporate pursuits, or belongings to be held on account of the acquisition.
Submitting Charges. Lastly, if an HSR Act notification is required then there are tiered submitting charges based mostly on the SOT being reported. For 2024, the adjusted HSR Act submitting charges are:
- $30,000—transactions valued lower than $173.3 million
- $105,000—transactions valued at $173.3 million or extra however lower than $536.5 million
- $260,000—transactions valued at $536.5 million or extra however lower than $1.073 billion
- $415,000—transactions valued at $1.073 billion or extra however lower than $2.146 billion
- $830,000—transactions valued at $2.146 billion or extra however lower than $5.365 billion
- $2.335 million—transactions valued at $5.365 billion or extra
In case you have any questions on these rule adjustments or HSR basically, please be at liberty to contact Michelle Yost Hale (202-973-8836), Ben Labow (415-947-2077), Kim Biagioli (202.937.8831), Beau Buffier (202-973-8948), Maureen Ohlhausen (202-973-8808), Taylor Owings (212-497-9507), Robin Crauthers (202-973-8839), Brendan Coffman (202-973-8891), or one other member of the antitrust and competition apply at Wilson Sonsini Goodrich & Rosati.