The Federal Trade Commission (FTC) announced on January 10, 2025, increased reporting thresholds for transactions. Annually, the FTC reviews and adjusts the premerger notification reporting thresholds for reporting acquisitions of voting securities, assets, or noncorporate interests (each a Transaction) under the Section 7A of the Clayton Act, as amended (commonly referred to as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act)) if the Consumer Price Index (CPI) increase since the last fiscal year is greater than 1 percent. The size-of-person thresholds are also adjusted annually based on the gross national product. The new thresholds become effective 30 days after publication in the Federal Register.
Revised Size-of-Transaction Thresholds
If a Transaction meets the revised thresholds set forth below (the size-of-transaction test), then the parties involved must file a premerger notification with the FTC and the Antitrust Division of the Department of Justice (DOJ) (unless an exemption applies, or the parties do not meet the size-of-person test, as applicable).
Original Threshold | 2025 Revised Threshold |
$50 million | $126.4 million (up from $119.5 million) |
$200 million | $505.8 million (up from $478 million) |
Revised Size-of-Person Test
The revised size-of-person threshold generally requires a Transaction to be reported if either party has total assets or annual net sales of $252.9 million or more (up from $239 million in 2024) and the other party has total assets or annual net sales of $25.3 million or more (up from $23.9 million in 2023). “Party” includes the ultimate parent entity (UPE) and such UPE’s controlled subsidiaries. If the parties involved do not meet these thresholds, and the Transaction does not meet the size-of-transaction test, then the Transaction is not reportable. If the Transaction size is more than $505.8 million (up from $478 million in 2024), then the size-of-person test does not apply and the Transaction is reportable.
Filing Fees
The fee for filing a premerger notification also increased based on the CPI as follows:
2025 Filing Fee (change from 2024 filing fee) | Size-of-Transaction Thresholds |
$30,000 (no change) | Greater than $126.4 million but less than $179.4 million |
$105,000 (no change) | $179.4 million or more but less than $555.5 million |
$265,000 (up $5,000) | $555.5 million or more but less than $1.111 billion |
$425,000 (up $10,000) | $1.111 billion or more but less than $2.222 billion |
$850,000 (up $20,000) | $2.222 billion or more but less than $5.555 billion |
$2,390,000 (up $55,000) | $5.555 billion or more |
When must a company file?
As there are a number of exceptions and exemptions, counsel should be consulted to further discuss and determine whether a Transaction may require a filing. Generally, however, the following guidelines apply:
- No Premerger Notification—When a Transaction is valued at or less than $126.4 million, the acquiring person and acquired person will not be required to file a premerger notification under the HSR Act.
- Potential Premerger Notification—Unless otherwise exempt, and depending on the assets and revenues of the parties involved (the size-of-person test detailed above), when a Transaction is valued at over $126.4 million but less than $505.8 million, a premerger notification filing may be required.
- Required Premerger Notification—Unless otherwise exempt, when a Transaction is valued at more than $505.8 million, a premerger notification filing will be required.
Interlocking Directorates Thresholds
Effective January 10, 2025, generally one person is prohibited from simultaneously serving as an officer or director of two competing corporations, if each corporation has capital, surplus, and undivided profits aggregating more than $51,380,000 (up from $48,559,000) under Section 8 of the Clayton Act. However, the “interlock” is not prohibited if: (1) the competitive sales of either corporation are less than $5,138,000 (up from $4,855,900); (2) the competitive sales of either corporation are less than 2 percent of that corporation’s total sales; or (3) the competitive sales of each corporation are less than 4 percent of that corporation’s total sales. Note that although statutorily this prohibition is applied against corporations, the FTC and DOJ positions are that the same concept may be enforced against limited liability companies, partnerships, and other noncorporate entities.
For more information, please contact Robin S. Crauthers, Jacob G. Shulman, or the McCarter & English lawyer with whom you normally work.