Want to do some M&A? That will cost you more

One of the main barriers to increasing merger and acquisition activity in the healthcare industry during 2023 may well be increasing antitrust oversight. Now you can add filing fees to the equation.

While likely to become more of an additional cost of doing business as opposed to actually stopping potential deals in their tracks, the increased merger and acquisition filing fees passed in the recent omnibus spending legislation contain notable hikes that will likely give strategists and CFOs a pause for thought.

In the first such increase in more than 20 years, filing fees for potentially larger deals are to jump significantly, according to breakdown of the new legislation from corporate law firm Torys. 

For example, any merger or acquisition deal valued at $5 billion or greater will include a filing fee of $2.25 million, a fraction of the deal size but much higher than the current $280,000 fee. Deals valued between $2 billion and $5 billion will entail an $800,000 fee.

Up to now, such filing fees have been divided into three tiers, namely $45,000, $125,000 and $280,000 depending on the size of the deal. As part of the new legislation, smaller deals — those sized between $101 million and $161.5 million — will actually entail a smaller filing fee ($30,000), while all others will have increased fees.

The threshold categories will increase from three to six. The new filing fee system is expected to be introduced later this year.

The increased federal revenue from the filing fees is expected to go toward greater antitrust scrutiny of merger and acquisition deals.

More details on the changes can be found here.

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