Each year, the federal antitrust agencies update the notification thresholds for the Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act. The HSR Act’s notification requirements apply to various types of transactions – mergers, acquisitions, nonprofit affiliations, and certain types of joint ventures – if the transaction meets a defined size (valuation) threshold.
On January 15, the Federal Trade Commission announced that the “size of transaction” threshold at which an HSR filing is required will increase from $75.9 million to $76.3 million.
HSR Overview. The HSR Act is a “report and wait” statute; it requires parties to certain proposed transactions to file an HSR notification form with both the FTC and U.S. Department of Justice and observe a statutory waiting period before consummating the transaction. Parties are required to file notification under the HSR Act, and therefore are subject to a waiting period, if the value of the transaction meets a certain size or, in certain transactions, if the parties meet a certain size as measured by their sales and assets. Although certain types of transactions may be exempt from the HSR Act, the exemptions infrequently apply to health care transactions.
HSR Thresholds. In general, once these January 15 changes are effective:
- Transactions valued at more than $305.1 million must be reported without regard to the size of the parties.
- Transactions valued at more than $76.3 million must be reported if one party has assets or sales exceeding $152.5 million and the other party has assets or sales exceeding $15.3 million.
A chart of the HSR threshold adjustments in last week's FTC notice is below. These changes will be effective in mid February 2015 – 30 days after publication of the FTC’s notice in the Federal Register.
Filing Fees. These revised thresholds will also affect the filing fees associated with HSR notification. The HSR Act requires the parties to a proposed transaction to pay one filing fee per transaction upon filing notification. The filing fee schedule is as follows:
- $45,000 for transactions valued in excess of $76.3 million but less than $152.5 million;
- $125,000 for transactions valued at $152.5 million or greater but less than $762.7 million; and
- $280,000 for transactions valued at $762.7 million or more.
A Word of Caution. Although the HSR thresholds for reporting transactions to the FTC and DOJ continue to increase annually, that is no safe haven for parties involved in transactions with values falling below the thresholds. Non-HSR reportable transactions are not immunized from antitrust scrutiny. Indeed, in the health care industry in particular, the FTC continues to investigate and even challenge transactions involving hospitals and/or physicians for raising antitrust concerns even though their values fall below the HSR reporting thresholds.