News

New HSR and interlocking directorate thresholds announced for 2025

13 January 2025

On 10 January 2025, the Federal Trade Commission (FTC) announced the annual jurisdictional adjustments for premerger notification filings made pursuant to Section 7A of the Clayton Act, known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The FTC also published an updated HSR filing fee schedule. The new filing thresholds and fees for HSR notification will become effective 30 days after publication in the Federal Register (anticipated to be effective on or about 13 February 2025).

REMINDER: The new HSR rule – which greatly expands filing parties’ disclosure obligations – takes effect on 10 February 2025 (impacting all filings submitted after 5 pm ET on 7 February 2025). This effective date may be delayed by the new Trump administration or impacted by a recent court challenge. For additional details about the rule change, please see our overview of the rule change here. For our clients considering transaction that may require an HSR filing under the new rule, we encourage you to contact us as soon as possible to allow adequate time to prepare

HSR Thresholds

Under the HSR Act, certain acquisitions of assets, voting securities, or interests in noncorporate entities (such as partnerships or limited liability companies) are subject to preclosing notification to the U.S. antitrust agencies and waiting period requirements if the applicable jurisdictional thresholds are satisfied and no exemption applies. Each year the FTC adjusts the HSR jurisdictional threshold tests based on changes to the U.S. gross national product.

The principal changes to the HSR jurisdictional thresholds will be as follows:

Filing thresholds
	Current thresholds	New thresholds
Size-of-transaction	Notification may be required if acquiring person will acquire and hold certain assets, voting securities, or interests in noncorporate entities valued at more thanUS$119.5 million.	US$126.4 million
Size-of-person	For transactions valued at more than US$119.5 million but less than or equal to US$478 million, one “person” to the transaction must have at least US$239 millionin total assets or annual net sales and the other must have at leastUS$23.9 millionin total assets or annual net sales.	For transactions valued at more than US$126.4 million but less than or equal toUS$505.8 million At least US$252.9 million and US$25.3 million in total assets or annual net sales.
Size-of-person	Transactions valued at more thanUS$478 millionare not subject to the size-of-person threshold test and are therefore reportable unless exempt.	US$505.8 million

Notification thresholds

Current thresholds

New thresholds

When completing an HSR filing, the acquiring person in a voting securities acquisition must indicate which notification threshold it will cross:

US$119.5 million,
US$239 million,
US$1.195 billion,
25 percent (if the value of the voting securities to be held is greater thanUS$2.39 billion), or
50 percent.

These notification thresholds are also relevant to a certain HSR exemption.

The new notification thresholds are:

US$126.4 million,
US$252.9 million,
US$1.264 billion,
25 percent (if the value of the voting securities to be held is greater thanUS$2.529 billion), or
50 percent.

HSR Filing Fees

The 2024 HSR filing fees will be as follows:

Transaction Value	Filing Fee
More than $126.4 million but 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

Interlocking Directorates Threshold

Section 8 of the Clayton Act prohibits a person from serving as a director or officer of two competing corporations if certain thresholds are satisfied and no exemption applies. The FTC is required to adjust annually certain thresholds related to Section 8 based on changes to the gross national product.

Under the new threshold, which will become effective upon publication in the Federal Register (expected imminently), a person may not serve as a director or officer of competing corporations if each corporation has capital, surplus, and undivided profits aggregating more than US$51,380,000, unless one of the corporations has competitive sales of less than US$5,138,000. Previously, a person was prohibited from serving as a director or officer of competing corporations if each corporation had capital, surplus, and undivided profits aggregating more than US$48,559,000 unless one of the corporations had competitive sales of less than US$4,855,900. Section 8 includes additional de minimis exceptions if either corporation's competitive sales are less than 2% of its total sales or if each corporation's competitive sales are less than 4% of its total sales.

The new HSR rule will require filing parties to disclose certain information about its officers and directors, including whether any officers or directors have similar roles in companies with products or services that overlap with those of the target. We expect that the agencies will utilize this information to enforce Section 8 of the Clayton Act more vigorously. As the FTC noted in the final rule: “when the agencies do become aware of existing or potential interlocks created by a reported transaction, they typically seek to remediate them consistent with the agencies’ enforcement authority and before consummation of the transaction.” The FTC further explained that “identification of these individuals will assist the agencies in determining whether the filers have had an opportunity to improperly share confidential information or integrate their businesses before the HSR Act's waiting period expires,” and that when they become aware that there are common officers and directors, “they may investigate whether there are on-going communications or interactions affecting the premerger competitive status quo, for example, by interfering with the other filer's competitive decision-making or placing executives from one entity into management positions at the other.”

Filing parties should anticipate questions from the agencies that may arise because of common officer and director relationships disclosed in their HSR filings and may want to track and analyze those relationships in the ordinary course of business to allow sufficient time to mitigate any antitrust risk that may arise.

HSR Civil Penalties

The FTC has not yet announced that the revised maximum civil penalties for violations of the HSR Act (currently US$51,744 per day for each violation). We will update this section once the revised amount is published.

Authored by Robert Baldwin, Michele Harrington, and John Hamilton.