On February 4, 2021, the US Federal Trade Commission (“FTC”) and the US Department of Justice (“DOJ”) jointly announced that they would immediately suspend the common practice of granting “early termination” of the initial 30-day waiting period under the Hart-Scott-Rodino Act (“HSR Act”). Citing an unprecedented volume of HSR Act filings, the US presidential transition, and the ongoing effects of the COVID-19 pandemic, Acting FTC Chairwoman Rebecca Slaughter and DOJ Deputy Assistant Attorney General Richard Powers stated that the full 30-day review period is necessary at this time to ensure that all HSR Act reportable mergers and acquisitions receive appropriate antitrust review. The announcement indicated that the agencies would be conducting a review of the processes and procedures used to grant early termination and that they anticipated that the suspension would be “temporary” and “brief.” Until the suspension is lifted, the initial HSR Act review period will be 30 days and, therefore, a minimum of one month for antitrust review should be incorporated into most transaction timelines when a filing under the HSR Act is required. Note, however, that the initial waiting period under the HSR Act remains 15 days for cash tender offers and bankruptcy sales pursuant to 11 U.S.C. § 363(b).

Additionally, on February 1, 2021, the FTC announced the annual adjustments to the monetary jurisdictional thresholds under the HSR Act, based upon the previous year’s GDP. Notification is required under the HSR Act if the “size of transaction” test and, when applicable, the “size of person” test are satisfied and no exemption from filing is available.

The “size of transaction” test threshold has been adjusted downward to $92 million (reduced from $94 million). Thus, if, as a result of the transaction, the Acquiring Person will hold voting securities/interests and/or assets of the Acquired Person valued at more than $92 million, the “size of transaction” test will be satisfied.

Transactions valued at or below $368 million (adjusted from $376 million) must also satisfy the “size of person” test. The adjusted “size of person” thresholds are as follows:

  • One Person must have annual net sales or total assets of at least $18.4 million (reduced from $18.8 million); and
  • The other Person must have annual net sales or total assets of at least $184 million (reduced from $188 million).

The FTC also announced that the maximum civil penalty amount has increased from $43,280 to $43,972 per day for violations of the HSR Act. The HSR Act filing fees remain unchanged. These revised jurisdictional thresholds will apply to all transactions that close on or after March 4, 2021.

For more on how the pandemic has affected the legal landscape of antitrust work and long term enforcement trends, listen to the Law, Policy & Markets podcast.