1. When Does a Deal Require Hsr Filing?
The HSR Act requires premerger notification when a transaction meets specific size thresholds. Filing obligations turn on two tests: the size of the transaction and, for mid-range deals, the size of the parties.
What Are the Hsr Size Tests?
A transaction is reportable when the value of voting securities, assets, or non-corporate interests acquired exceeds the size-of-transaction threshold. Effective February 17, 2026, that threshold is $133.9 million. Transactions valued above $535.5 million are unconditionally reportable regardless of party size.
For transactions between $133.9 million and $535.5 million, an additional size-of-person test applies. Using 2026 figures, one party must have annual net sales or total assets of at least $267.8 million, and the other must have at least $26.8 million. If neither party meets these thresholds, no filing is required even when the transaction value falls within that range.
The FTC adjusts all thresholds annually and announces the applicable effective date. Parties should confirm current figures through FTC guidance before concluding that a transaction is below the reporting requirement.
Filing fees scale with transaction value, ranging from tens of thousands of dollars to more than $2 million. The acquiring person bears the fee obligation, though both parties submit separate notification forms.
2026 HSR Form Update: Following a federal district court ruling, the FTC is currently accepting the pre-February 2025 form and instructions. Parties may voluntarily submit the newer form. Parties preparing a filing should verify which form is in effect at the time of submission.
See Hart-Scott-Rodino Filing for current threshold figures, filing fee tiers, and notification form requirements.
2. Which Transactions Are Exempt from Hsr Filing?
Even when a transaction meets the numeric thresholds, several statutory and regulatory exemptions may eliminate the filing obligation:
- Acquisitions of certain goods and specified categories of real property under 16 C.F.R. §§ 802.1–802.5 — the exemption depends on the nature and use of the assets and does not cover every real estate acquisition
- Intracompany transactions among entities under common control
- Certain foreign-to-foreign transactions with limited U.S. .exus under 16 C.F.R. §§ 802.50–802.52
- Passive investments of 10% or less of an issuer's voting securities held solely for investment without any intent to influence management or operations
- Certain acquisitions of nonvoting securities, debt obligations, or convertible instruments
Exemption analysis is fact-specific. A transaction that appears to qualify may still require filing depending on deal structure, the nature of the assets, and whether the acquirer takes an active role in the target entity.
3. What Is the Hsr Review Timeline?
Once both parties submit notification forms and the filing fee is paid, the mandatory waiting period begins and the agencies conduct their substantive review.
What Happens after a Second Request?
The initial HSR waiting period is 30 calendar days for most transactions. For cash tender offers and qualifying bankruptcy transactions, the period is 15 days.
If neither agency takes action before the waiting period expires, the parties may close. Parties may request early termination, and the agencies have resumed granting it in transactions that present no material competitive concerns. Early termination remains discretionary, however, and parties should not assume it will be granted when setting a contractual closing date.
During the initial review, agency staff examine the notification forms and any voluntarily submitted materials and determine whether to issue a formal request for additional information.
What Happens after a Second Request?
A Second Request is a formal demand for additional information and documentary material under 15 U.S.C. § 18a(e). When issued, the waiting period pauses and resumes only after the parties certify substantial compliance. The additional period after substantial compliance is 30 days for most transactions and 10 days for cash tender offers and qualifying bankruptcy transactions.
Responding to a Second Request is one of the most resource-intensive stages of a merger. Parties produce large volumes of documents, respond to detailed interrogatories about competitive conditions, and submit economic analyses of market structure and pricing. When a Second Request issues, the timeline from filing to closing commonly runs several months to over a year. Complex transactions in concentrated markets have taken two years or more to resolve.
An antitrust lawyer can assess Second Request risk before a letter of intent is signed, allowing deal teams to build realistic timelines into the acquisition agreement and structure closing conditions that account for regulatory delay.
4. How Agencies Evaluate Competitive Effects
The FTC and DOJ assess whether a proposed acquisition would substantially lessen competition or tend to create a monopoly under Section 7 of the Clayton Act, 15 U.S.C. § 18. The December 2023 Merger Guidelines describe, as a nonbinding analytical framework, how the agencies approach that assessment.
| Agency Issue | What the Agencies Examine |
|---|---|
| Market definition | Relevant products, services, and geographic areas where competition may be affected |
| Concentration | Market shares, HHI, and changes in concentration. A post-merger HHI above 1,800 combined with an increase of more than 100 points may raise a structural presumption in the agencies' analysis. |
| Unilateral effects | Whether the merged firm could profitably raise prices or reduce quality without coordinating with competitors |
| Coordinated effects | Whether the transaction increases the likelihood of tacit or explicit coordination among remaining market participants |
| Entry and expansion | Whether potential competitors could enter at sufficient scale and speed to discipline a post-merger price increase |
| Efficiencies | Whether merger-specific cost savings are verifiable and benefit consumers in a way that offsets competitive concerns |
Internal documents are a central focus of agency review. Records describing the acquisition target as a close competitor, discussing post-merger pricing strategy, or analyzing customers' ability to switch receive particular scrutiny during a Second Request. Deal teams should identify and understand the content of these documents well before filing.
For a broader discussion of the antitrust standards governing both merger review and market conduct, see Antitrust and Competition Law.
5. Remedies and Deal Risk
When agencies identify competitive concerns that cannot be resolved through investigation alone, they pursue remedies or, where no adequate remedy is available, seek to block the transaction.
When Do Agencies Require a Divestiture?
Divestitures are the agencies' preferred remedy. Merging parties agree to sell specific business units, product lines, facilities, or assets as a condition of closing, with the objective of preserving competition by creating or strengthening an independent competitor in the affected market.
A divestiture typically requires:
- Completing the sale to an agency-approved buyer within a defined post-closing period, often six to twelve months
- Maintaining the assets in competitive, independent operating condition pending sale
- Accepting an agency-appointed monitor or trustee to oversee compliance
If no acceptable buyer is identified within the required timeframe, the agency may appoint a divestiture trustee with authority to sell on whatever terms are available.
Can Behavioral Remedies Resolve Merger Concerns?
Behavioral remedies may be acceptable where divestitures are impractical or disproportionate to the identified competitive concern. They require the merged entity to take or refrain from specific post-closing actions, such as licensing intellectual property to competitors on non-discriminatory terms, maintaining interoperability with third-party platforms, establishing information firewalls between formerly competing business units, or continuing to supply existing customers on prior-contract terms for a defined period.
Behavioral conditions are memorialized in consent orders filed with the FTC or binding commitments accepted by the DOJ. Violations carry civil penalties of more than $50,000 per day. Consent orders typically remain in effect for ten years.
When parties and agencies cannot agree on adequate remedies, the agency may seek a preliminary injunction in federal court to halt closing pending trial. A successful injunction is functionally equivalent to a deal block in most transactions, because sellers are unwilling to remain bound by a merger agreement through years of antitrust litigation.
6. Deal Agreement Provisions for Regulatory Risk
The regulatory review process creates material deal risk that buyers and sellers address directly in the acquisition agreement.
What Is Gun Jumping and Why Does It Matter?
Gun jumping is the premature transfer of operational control or competitively sensitive coordination before the HSR waiting period expires and the transaction has lawfully closed. Conduct that can constitute gun jumping includes:
- Making or approving pricing, hiring, or strategic decisions for the target before closing
- Sharing competitively sensitive information outside an appropriate clean team arrangement
- Allowing the acquirer to participate in customer relationships before the transaction is final
- Taking irreversible integration steps that effectively combine the businesses before the waiting period ends
Gun jumping is a violation of the HSR Act regardless of whether the transaction ultimately closes, and penalties apply to both parties. Clean team protocols and well-defined integration planning boundaries are standard risk management tools during the pre-closing period. For how to structure integration work that can proceed lawfully before closing and what operational steps belong after it, see Post-Merger Integration.
How Do Deal Agreements Allocate Regulatory Risk?
Acquisition agreements in transactions with regulatory complexity typically address the following:
- Efforts standard: specifying whether the buyer must use reasonable best efforts, hell-or-high-water obligations, or a more limited standard to obtain antitrust clearance
- Divestiture commitments: defining in advance what assets the buyer is obligated to divest or hold separate to obtain clearance
- Outside date: setting the deadline by which either party may terminate if clearance has not been obtained, with extension rights if proceedings are ongoing
- Reverse termination fee: the amount the buyer pays if the transaction fails to close due to failure to obtain regulatory clearance
- Second Request cost allocation: determining which party bears the expense of responding to agency investigative demands
- Cooperation obligations: specifying the buyer's duty to cooperate with agency requests, including access to information and personnel for agency interviews
These provisions directly affect how much regulatory risk each party bears. A buyer with strong incentive to close may accept broader divestiture commitments or a higher reverse termination fee. A seller uncertain about closing may insist on a shorter outside date or cash fee as protection against a prolonged review.
Parallel Regulatory Reviews
HSR clearance is one of several regulatory processes that may run simultaneously for a given transaction. The following table identifies the most common parallel reviews.
| Review | Applicable When | Agency | Notable Timeline Factor |
|---|---|---|---|
| CFIUS national security | Foreign acquirer or beneficial owner; covered U.S. .usiness in sensitive sectors | CFIUS | 30-day initial review; 45-day full investigation; 15-day extension for mitigation |
| NY hospital / nursing home / D&T center (PHL Art. 28) | Certificate-of-need entities | NYSDOH | Often 12+ months; independent of HSR |
| NY home care (PHL Art. 36) | Licensed home care services agencies | NYSDOH | Varies by transaction type and structure |
| NY healthcare transaction notice (PHL Art. 45-A) | Health care entities meeting specified size or revenue criteria | NYSDOH | 30-day advance notice minimum |
| NY insurance (Ins. Law § 1506) | 10%+ of voting securities of NY domestic insurer | NYDFS | Prior approval required; varies |
| NY banking | NY-chartered bank or thrift acquisition | NYDFS; federal bank regulators | Parallel regulatory tracks |
| NY public utilities | Utility operations in New York | NY Public Service Commission | Varies by nature of transaction |
None of these reviews are satisfied by HSR clearance. In regulated industries, identifying all required approvals before signing a binding agreement is essential to structuring closing conditions with realistic outside dates.
For the CFIUS filing process, covered business definitions, and mitigation agreement framework, see CFIUS Compliance.
01 Jul, 2025
