Merger filing fee hikes go into effect

Dive Brief:

Effective Monday, companies will be required to pay the U.S. government higher filing fees for large merger deals, with costs skyrocketing by as much as 700% in some cases.
The new fees, which were included in omnibus spending legislation enacted by Congress at the end of last year, are intended to raise additional revenue for U.S. antitrust enforcement efforts at the Federal Trade Commission and U.S. Department of Justice.
Filing fees for the largest transactions valued at over $5 billion have now increased to $2.25 million, up from $280,000. Fees for the smallest deals valued at between $101 million and $161.5 million decreased to $30,000 from $45,000.

Dive Insight:

The change marks the government’s first merger filing fee increase in more than two decades. The fee adjustments reflect a broader push by the Biden administration and members of Congress on both sides of the aisle for tougher U.S. antitrust enforcement, including tighter scrutiny of big mergers.

The changes were incorporated in the Merger Filing Fee Modernization Act, a bipartisan bill authored by Sen. Amy Klobuchar (D-Minn.) that was contained in the spending package signed by President Joe Biden on Dec. 29.

The FTC published a Federal Register notice with the effective date on Jan. 26

The influx of new revenue for the FTC and DOJ could mean increased scrutiny of merger transactions but is unlikely to deter dealmaking, according to antitrust lawyers.

“Parties will have to pay close attention to their pre-filing antitrust analysis and make sure they understand what risks are involved,” George Paul, an antitrust partner at White & Case LLP, told CFO Dive last month.

For now, the economy remains the primary threat to mergers and acquisitions in the coming year, he said.

M&A activity slumped in North America in 2022 after record numbers in 2021, according to an analysis by S&P Global Market Intelligence. The aggregate value of M&A deals in the U.S. and Canada dropped to $1.477 trillion in 2022, down 41.4% from 2021, and the number of transactions in 2022 fell 21.2% year over year to 20,965, the firm said.