M&A Alert

Bipartisan Bill to Increase Megamerger HSR Filing Fees Passed Out of Senate Judiciary Committee

May 18, 2021

Senators Amy Klobuchar (D-MN) and Ted Cruz (R-TX) do not agree on much, but they agree on one thing. The government filing fees on mergers, which have not been updated since 2001, need to be updated and large transactions should be subject to significantly higher filing fees. To that end, the Merger Filing Fee Modernization Act, which was co-authored by Senators Klobuchar and Chuck Grassley (R-IA), was unanimously passed out of the Senate Judiciary Committee and is now headed to full vote on the Senate floor. The bill modifies and expands the schedule for graduated merger filing fees and requires they be adjusted each year based on the Consumer Price Index, similar to how the HSR filing thresholds are adjusted each year. In the debate over whether antitrust laws need to be reformed or if antitrust enforcers simply need more resources to enforce the laws already on the books, more resources appears to have more bipartisan support, for now.

During the hearing last week, Senator Cruz expressed concern that the federal antitrust enforcers have been “too lax” in challenging anti-competitive transaction but that was balanced against his concerns about the impact increased enforcement could have on small businesses whose transactions barely cross the lowest HSR threshold.

In apparent response to these concerns, Senator Klobuchar has noted that the fees for all mergers that are less than $919.9 million would be reduced by the Act and that the increased fees for larger transactions would bolster resources for the federal antitrust agencies without passing on any of the costs to taxpayers.

Senator Josh Hawley (R-MO) also supported the bill, but he noted that various state Attorney Generals have being doing some of the most important work in antitrust recently. He wondered if Congress “ought not to be directing more resources to state attorneys general.” This comment comes on the heels of a bipartisan coalition of 45 attorneys general sending a letter to congressional leaders earlier last week requesting the federal government to provide the necessary funding to support state antitrust enforcement efforts.

In the letter, the AGs state that “antitrust policy is at a pivotal moment, and a bipartisan consensus is growing in Congress and beyond that more robust antitrust enforcement across a multitude of markets is needed.” The AGs went on to state that “[a]dditional funding of antitrust enforcement is required at both the federal and state levels.”

It remains unclear if the Merger Filing Fee Modernization Act will pass the full Senate, but it is unlikely to be the last antitrust reform bill passed this year. After initially introducing a sweeping antitrust reform bill that critics claimed would harm the economy, Senator Klobuchar recently signaled a willingness to break up her bill into bite-sized chunks that have bipartisan support, with the Merger Filing Fee Modernization Act being just the first bite. Her House counterpart, Rep. David Cicilline (D-R.I), has said he plans to follow a similar strategy in the House and will offer a series of antitrust reform bills forcing opponents to derail several measures rather than just one being able to focus their criticism on a single bill.

The current HSR Act filing fee schedule, which has not changed since 2001, is as follows:

  • $45,000 for transactions valued at more than $92 million,
    but less than $184 million;
  • $125,000 for transactions valued at $184 million or more,
    but less than $919.9 million; and
  • $280,000 for transactions valued at $919.9 million or more.

If the Merger Filing Fee Modernization Act were to pass, the HSR filing fee schedule would be as follows:

  • $30,000 for transactions valued at more than $92 million,
    but less than $161.5;
  • $100,000 for transactions valued at $161.5 million or more,
    but is less than $919.9 million;
  • $250,000 for transactions valued at $919.9 million or more,
    but is less than $1 billion;
  • $400,000 for transactions valued at $1 billion or more,
    but is less than $2 billion;
  • $800,000 for transactions valued at $2 billion or more,
    but is less than $5 billion; and
  • $2.25 million for transactions valued at $5 billion or more.