Jurisdictional Thresholds for Industry Mergers

Jurisdictional thresholds determine if a merger requires regulatory review. These thresholds, based on factors like revenue, assets, or market share, vary by region and industry. Non-compliance can lead to penalties or deal reversals. Here's what you need to know:

• U.S. Thresholds (2025): $51.38M transaction size; $5.138M individual party revenues under the Hart-Scott-Rodino Act.
• EU Thresholds: €5B combined global turnover; €250M per party within the EU.
• Industry-Specific Rules: Tailored thresholds exist for sectors like healthcare, technology, and energy.
• Filing Steps: Assess thresholds, prepare financial records, and comply with fees ($30K–$2.335M based on transaction size).
• Cross-Border Mergers: Handle multi-country filings carefully; timelines and criteria differ globally.

Quick Comparison of Threshold Types

Understanding and complying with these thresholds is critical to avoid delays, penalties, or deal reversals.

Types of Thresholds and Assessment Criteria

Revenue Thresholds

Revenue thresholds are key to determining whether mergers need to be reported. In the EU, a merger must be notified if the combined global turnover exceeds €5 billion, with at least two parties generating €250 million each within the EU. In the U.S., the Federal Trade Commission (FTC) uses different benchmarks. For 2025, Section 8 of the Clayton Act sets the thresholds at $51,380,000 for transaction size and $5,138,000 for individual party revenues.

Although revenue thresholds are the most common, factors like asset value and market share are also important in certain industries.

Asset and Market Share Limits

Asset and market share thresholds differ widely depending on the industry and jurisdiction, especially in sectors with high entry barriers. The International Competition Network (ICN) recommends using measurable factors like sales volumes and asset values to create clear reporting standards.

Beyond these, deal value thresholds address gaps left by traditional criteria, particularly in sectors driven by intangible assets.

Deal Value Requirements

In industries such as technology and pharmaceuticals, where intangible assets like intellectual property are often the driving force, deal value thresholds help ensure significant transactions don’t bypass scrutiny.

"Companies must carefully assess the value of the transaction and the parties involved to determine if a filing is required. Failure to notify can result in significant fines and even the unwinding of the deal."

The evaluation process must take into account the purchase price, future earnouts, assumed liabilities, and non-monetary assets like intellectual property. Missing a required notification can lead to steep penalties or even the reversal of the deal.

Industry-Specific Rules and Filing Steps

Industry Threshold Differences

Merger control rules can vary widely between industries, adding complexity to compliance efforts. Here's a breakdown of how thresholds differ across key sectors:

The 2023 Illumina/Grail case highlighted the importance of tracking regulatory updates, even for deals that seem to fall below traditional thresholds.

Meeting these thresholds is just the starting point. Filing correctly means gathering the right documentation and sticking to strict regulatory timelines.

Filing Preparation Steps

1. Pre-Filing Assessment

Evaluate whether the deal meets criteria such as the size-of-person thresholds ($239M/$23.9M) or the size-of-transaction threshold ($478M).

2. Documentation Requirements

Prepare and organize the following:

• A clear description of the transaction
• Financial records and revenue details
• Market analysis reports
• Studies on how the deal could impact competition

3. Fee Structure Compliance

Filing fees depend on the transaction size, ranging from $30,000 for smaller deals to $2.335M for those exceeding $5.365B.

"Parties must submit a premerger notification form containing a short description of the transaction and basic information about the filing party. It is essential to prepare certain documents that analyze the transaction concerning competition-related topics and expected synergies or efficiencies."

In regulated industries, antitrust due diligence must also address specific licensing or certification needs that could influence the approval process.

Multi-Country Merger Requirements

Handling mergers across multiple countries has become more challenging. Take the Illumina/Grail case, for example. The European Commission took jurisdiction over a deal that didn’t meet standard thresholds, showing how regulatory bodies are expanding their reach beyond traditional limits.

Timeline Management

Staying on top of timelines is crucial when dealing with mergers across jurisdictions. A good example of changing regulatory frameworks is the Australian Competition and Consumer Commission's move to mandatory merger control in 2026.

Review periods vary widely. For instance, the EU’s merger control process typically takes 25 working days for a Phase I review but can extend to 90 working days for a Phase II investigation.

Resolving Filing Conflicts

Timelines are important, but resolving conflicting jurisdictional requirements is just as critical. Cross-border transactions, especially in regulated industries, are under increasing scrutiny.

Here’s how to handle these challenges:

• Work with local counsel early to navigate jurisdiction-specific requirements.
• Align transaction narratives across countries to avoid regulatory delays.
• Prepare consistent documentation that meets the standards of multiple jurisdictions.

"Parties must conduct a global premerger antitrust risk assessment and ensure that positions taken across jurisdictions are consistent to avoid regulatory complications and potential delays in the approval process."

Different countries approach mergers differently. For example, Bulgaria and Hungary use turnover tests to evaluate revenues, while Spain and Portugal focus on market share. This makes it vital to adjust strategies based on local requirements, especially in sensitive sectors like healthcare or technology.

Industries with stricter regulations often face closer scrutiny, particularly in deals affecting trade within the EU. Keep thorough records to meet the demands of multiple jurisdictions and ensure compliance with industry-specific rules to avoid unnecessary delays.

sbb-itb-e766981

M&A Advisory Support

With the introduction of Australia's mandatory merger control in 2026 and increasingly complex regulatory frameworks worldwide, expert guidance is becoming more crucial for navigating merger processes.

Financial Advisor Functions

M&A advisors play a critical role in helping businesses manage the intricate details of mergers, ensuring compliance with jurisdictional thresholds and regulatory demands. Their expertise is key when dealing with industry-specific hurdles and multi-jurisdictional challenges.

"Parties must conduct a global premerger antitrust risk assessment and ensure that positions taken across jurisdictions are consistent to avoid regulatory complications and potential delays in the approval process."

For growth-stage businesses, specialized support from firms like Phoenix Strategy Group can help simplify these complexities.

Phoenix Strategy Group Services

Phoenix Strategy Group provides a range of services designed to address the challenges of multi-jurisdictional mergers. Their offerings include:

• Financial Modeling: Detailed analysis of revenue streams and market positions to ensure threshold compliance.
• Compliance Services: Managing documentation and regulatory requirements across various jurisdictions.
• Strategic Advisory: Tailored advice on merger timing and jurisdictional strategies.

Summary

Key Points Review

Merger thresholds now require a closer look due to updated 2024 regulatory standards. If transactions meet the new size-of-person and size-of-transaction criteria, companies must ensure they fulfill filing obligations. Non-compliance carries steep penalties - up to $51,744 per day for violations.

These changes are particularly critical for mergers in regulated industries, where extra layers of oversight often apply, and for cross-border deals that involve filings across multiple jurisdictions. The evaluation process must account for varying regulatory frameworks, reflecting the latest standards.

Companies need to stay ahead of these updates to avoid penalties and delays.

Action Steps

Preparing for these updates requires a structured strategy. Businesses should focus on these three areas:

• Antitrust Risk Assessments: Analyze filing requirements across all relevant jurisdictions, covering both mandatory and optional thresholds.
• Documentation Preparation: Gather financial records, market studies, and transaction specifics to ensure all compliance needs are met.
• Expert Guidance: Partner with advisors like Phoenix Strategy Group to handle the complexities of multi-jurisdictional filings and maintain consistency.

For mergers spanning multiple jurisdictions, preparation timelines may significantly increase. The FTC estimates a fourfold rise in preparation time under the revised rules. Starting early with experienced advisors can help streamline the process and reduce risks.

FAQs

What are the exemptions for merger control?

Some transactions are not subject to merger control rules. These often include deals involving government entities, non-profits, or financial institutions under certain conditions. However, the specifics depend on the jurisdiction, industry rules, and the parties involved.

Exemptions allow certain transactions to bypass filing requirements, simplifying the process in specific scenarios.

The Illumina/Grail case emphasized that the European Commission (EC) can review mergers referred by national authorities, even if they don't meet the usual thresholds. This showcases the complexity of exemptions in international deals.

"The ECJ's judgment has clarified the European Commission's jurisdiction to review mergers referred by national competition authorities, even if national thresholds are not met."

As more jurisdictions adopt mandatory merger control, exemption criteria are likely to shift. Companies should evaluate their transactions carefully, keeping in mind:

• The nature of the parties involved
• Industry-specific regulations that may override general exemptions
• Jurisdictional rules in each relevant market
• The transaction's potential effect on market competition

Navigating exemptions is a key part of staying compliant with merger control laws, especially in multi-jurisdictional scenarios. For complex cases, consulting experienced M&A advisors can provide clarity and ensure all regulatory requirements are met.

Related Blog Posts

• Jurisdictional Thresholds in M&A: Calculation Examples
• Checklist for Jurisdictional Threshold Calculations
• AML Compliance for Crypto M&A: What to Know
• Data Privacy Due Diligence for Cross-Border M&A