HSR Act — Hart-Scott-Rodino Premerger Notification

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) requires parties to certain mergers, acquisitions, and other covered transactions to notify the federal government and observe a waiting period before closing. As of April 8, 2026, the basic size-of-transaction threshold is $133.9 million, with annual FTC adjustments taking effect on a rolling basis. The filing requirement is procedural rather than substantive: it gives the Federal Trade Commission and the Department of Justice Antitrust Division a pre-closing window to assess whether the transaction may substantially lessen competition under Clayton Act Section 7.

Current Law (2026)

Legal Authority

• 15 U.S.C. § 18 (Clayton Act § 7) — The substantive prohibition: no person may acquire the stock or assets of another company where the effect may be substantially to lessen competition, or to tend to create a monopoly, in any line of commerce in any section of the country
• 15 U.S.C. § 18a — Premerger notification and waiting period: before completing covered acquisitions above the applicable thresholds, the filing person or persons must submit notification and observe the waiting period
• 15 U.S.C. § 18a(b) — Waiting periods: generally 30 days after filing, with shorter periods for cash tender offers and certain bankruptcy transactions, and separate timing rules after a request for additional information
• 15 U.S.C. § 18a(c) — Exemptions: excludes categories such as certain ordinary-course acquisitions, some passive investment acquisitions, intraperson transactions, and other transactions defined by statute or rule
• 15 U.S.C. § 18a(d) — Rulemaking authority: FTC prescribes rules defining covered transactions, notification content, exemptions, and filing mechanics
• 15 U.S.C. § 18a(g) — Civil penalties and injunctive tools: closing a reportable transaction without filing, or before the waiting period expires or is terminated, can trigger daily civil penalties and equitable relief
• 15 U.S.C. § 18b — Foreign subsidy disclosures: certain HSR filers must disclose specified subsidies from foreign entities of concern as part of the filing package

How It Works

The HSR Act (15 U.S.C. § 18a) is a screening regime, not the substantive antitrust test itself — filing does not mean a deal is presumed anticompetitive. It simply triggers the review process through which the FTC or DOJ assesses the transaction under the broader antitrust law framework of § 18. Thresholds adjust annually (February), and the operative threshold for reportability is the one in effect at closing, while the filing fee is keyed to thresholds in effect when the waiting period begins — a practical timing point for transactions that straddle an adjustment date. In the middle threshold band (deals above the minimum but below the upper threshold), both a size-of-transaction and a size-of-person test must be satisfied; once a deal exceeds the upper threshold ($535.5 million for 2026), the size-of-person analysis generally drops out and filing is required regardless of party size. Exemptions are as determinative as thresholds in practice — real HSR analysis often turns on whether a transaction falls within a rule-based exemption (e.g., acquisitions of voting securities solely for investment, certain intracompany transactions, acquisitions of real property or certain assets in the ordinary course of business) rather than just on the headline dollar value. An HSR clearance covers only the specific transaction filed and only up to the threshold crossed — it does not provide blanket clearance for future acquisitions beyond that threshold.

The HSR Filing Process

Who must file: Parties to an acquisition must file when:

1. Size-of-transaction: The acquisition will result in the buyer holding more than the adjusted threshold, which for transactions closing on or after February 17, 2026 is $133.9 million; OR
2. Size-of-person + size-of-transaction: The transaction is above $133.9 million but not above $535.5 million, and one person has at least $267.8 million in total assets or annual net sales while the other has at least $26.8 million

These thresholds are adjusted annually by the FTC. For deals above $535.5 million under the 2026 thresholds, the size-of-person analysis generally drops out.

What the filing includes: The notification form requires information about the transaction, the parties, their lines of business, and specified supporting documents. In practice, the agencies focus heavily on competition-sensitive materials prepared for officers, directors, and deal teams, including the classic 4(c) and 4(d) materials. Foreign-subsidy disclosures under 15 U.S.C. § 18b are also part of the modern filing framework. Transactions involving foreign buyers may also trigger a parallel CFIUS review.

The waiting period: After both sides file, the waiting period generally runs for 30 days, or 15 days for cash tender offers and certain bankruptcy transactions. During that period, one agency typically takes primary responsibility for the investigation, and staff may contact customers, competitors, suppliers, or other market participants. If the waiting period expires without further action, or if it is terminated early, the parties may close from the HSR perspective.

The Second Request: If the reviewing agency needs more information, it can issue a request for additional information and documentary material, commonly called a "Second Request." The parties then must substantially comply before the post-compliance waiting period starts. In significant matters, this can turn a short HSR review into months of document collection, data production, depositions, and negotiations over timing.

Early termination: Parties may request early termination. The FTC currently maintains a public early-termination notice system, and the agency states that a request may be granted only after both agencies have completed their review and decided not to act during the waiting period. That said, early termination remains discretionary rather than guaranteed.

The Clayton Act Substantive Standard

Filing with the HSR Act is the procedure; the Clayton Act Section 7 (§ 18) is the substantive law the government uses to block deals. Section 7 prohibits acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly."

"Substantially lessen competition" is the key phrase. The agencies continue to use the 2023 Merger Guidelines as a non-binding analytical framework for merger review. See Securities Regulation for the disclosure requirements that public-company mergers also trigger. Market definition, concentration, head-to-head competition, vertical effects, labor-market effects, and acquisition-of-nascent-competition theories can all matter depending on the facts.

Remedies: The government can either challenge a deal in federal court (seeking to block or unwind it) or negotiate a consent decree requiring the parties to divest specific assets or businesses to restore competition. Divestitures are common in deals involving overlapping product lines — a grocery chain merger might require selling stores in specific markets.

Gun-jumping: Parties to pending HSR filings cannot coordinate on competitive matters or begin integrating their businesses before the waiting period expires and the deal closes. "Gun-jumping" violations are separate from substantive antitrust violations and carry their own civil penalties.

How It Affects You

If you're a business acquiring another company: Run HSR analysis at the letter-of-intent or term-sheet stage, not after signing. As of April 8, 2026, key questions include whether the deal exceeds the $133.9 million threshold, whether the size-of-person test applies, whether a rule-based exemption fits, and whether the filing fee lands in the correct tier. A required filing usually means at least a 30-day timing condition before closing, plus the possibility of a Second Request that can stretch the review much longer. Noncompliance can draw civil penalties of up to $53,088 per day.

If you're a deal attorney structuring the merger agreement: Build the HSR timetable into the merger agreement's conditions, outside dates, cooperation covenants, and risk-shifting provisions. Pay close attention to the transaction-value calculation, the exact threshold sought in any voting-securities filing, the need to preserve and collect 4(c) and 4(d) materials, and the difference between ordinary expiration of the waiting period and a discretionary early termination request.

If you're the acquisition target: You're also a filing party with independent obligations — the HSR process requires both buyer and seller to file. Your confidential business information (revenue by product line, customer concentration, pricing data) goes to the reviewing agency under confidentiality protections, but the agency uses it to assess competitive effects. The most sensitive documents from the government's perspective are those your management created about why the deal makes strategic sense — particularly any documents that discuss competitive benefits, market share changes, or elimination of a competitor. These documents are often used against the merging parties in investigations and litigation.

If you're a competitor of merging companies: You can still provide information to the reviewing agency even though you are not a filing party. Competitor, customer, and supplier outreach remains a standard part of many merger reviews, especially when the agencies are trying to assess overlaps, entry conditions, or head-to-head bidding dynamics.

State Variations

HSR is a federal filing requirement but state antitrust authorities conduct independent merger reviews under state antitrust laws for transactions affecting their markets. Attorneys general in states like California, New York, and Texas have independently challenged or imposed conditions on mergers that federal agencies cleared. Large deals must plan for both federal HSR compliance and the possibility of state review, particularly for consumer-facing businesses with market presence in multiple states.

Implementing Regulations

The FTC regulations implementing the HSR premerger notification program are split across three main Parts in 16 CFR:

• 16 C.F.R. Part 801 — Coverage Rules — the definitional and computational core of HSR: who the "person" is, what counts toward the transaction value, how to aggregate prior holdings, and when conversions and tender offers trigger notification. Key provisions:

  • § 801.1 — "Person" definition: the critical foundational concept; for HSR purposes, a "person" means the ultimate parent entity (UPE) and ALL entities it controls, directly or indirectly; this means that when Company A acquires even a small entity from Group B, the "acquiring person" is A's entire corporate family and the "acquired person" is B's entire family — so the size-of-person thresholds are tested at the enterprise level, not the deal-entity level; for corporations, "control" means holding 50% of voting securities or having the contractual right to designate a majority of directors
  • § 801.10 — Valuing the acquisition: for publicly traded voting securities, value equals the market price on the last trading day before the notification date times the number of securities to be acquired; for non-publicly traded securities or assets, value is the acquisition price agreed by the parties; if no price is established (e.g., in an exchange), the greater of the fair market value or the book value of the assets or issuer's voting securities
  • § 801.13 — Aggregation: once an acquiring person holds voting securities of an issuer, subsequent acquisitions are aggregated with existing holdings to test whether a notification threshold is crossed; a person who owns 9.9% of an issuer and buys 1% more must test whether the aggregate 10.9% holding — valued at current market — now crosses the transaction threshold
  • § 801.14 — Aggregate total amount: the HSR "transaction value" includes the value of all voting securities to be held (not just newly acquired), plus all assets to be acquired, plus all noncorporate interests to be held; for mergers where the acquirer already holds shares, this can make the transaction value significantly larger than the stated deal price
  • § 801.30 — Tender offers: for acquisitions of voting securities on a national securities exchange or from third parties, notification may occur before the offer commences; the waiting period runs from the later of the acquiring person's filing or the target's filing; this allows tender offers to be launched while HSR is pending — the deal cannot close until the waiting period expires, but the offer can be out in the market
  • § 801.40 — Joint ventures: in a new joint venture formation (not a merger or consolidation), the contributing parties are the filing parties; the newly formed entity itself is not required to file; the "acquisition" is the contributing parties' receipt of interests in the JV entity in exchange for contributed assets or capital; the JV formation is subject to HSR if the contributed value or the resulting interests exceed the applicable thresholds
  • § 801.90 — Anti-avoidance: any transaction or device entered into for the purpose of avoiding HSR obligations is disregarded; the substance of the transaction controls, not its form; the FTC has applied this provision to side-letter arrangements that formally divided a reportable acquisition into sub-threshold tranches

  The Part 801 definitions drive most of the analytical work in HSR compliance — deal teams spend more time on the coverage questions (does this deal require filing? is there an exemption?) than on the mechanics of filling out the form. The "person" definition in § 801.1 is particularly consequential: it means private equity fund portfolios must be analyzed for cross-portfolio holdings of the same issuer, because a PE fund's acquisition of Company X requires checking whether any other portfolio company of the same fund family already holds voting securities of Company X. The 2024 HSR reform rule (effective February 2025) significantly expanded the required disclosure package without changing the threshold triggers in Part 801.

• 16 C.F.R. Part 803 — Filing procedures, waiting periods, form mechanics, and related administrative rules

• 16 C.F.R. § 1.98(a) — Current FTC civil-penalty adjustment provision for 15 U.S.C. § 18a(g)(1)

16 C.F.R. Part 802 — Exemption Rules contains the most analytically important provisions in day-to-day deal practice. Key exemptions:

• § 802.1 — Ordinary course of business goods: routine acquisitions of new goods and current supplies are exempt; acquiring an "operating unit" (assets operated as a business undertaking in a particular location or for particular products/services) is NOT in the ordinary course, even if the assets are tangible property.
• § 802.2 — Real property: new facilities (never produced income, built for sale or held solely for resale) are exempt. Used facilities acquired from a lessor who held title solely for financing purposes and where the lessee had continuous sole possession since the facility was new are also exempt.
• § 802.3 — Carbon-based mineral reserves: oil, natural gas, shale, and tar sands reserves plus associated exploration/production assets are exempt if the value to be held as a result of the acquisition does not exceed $500 million (as adjusted). Coal reserves and associated assets are exempt if the value does not exceed $200 million (as adjusted).
• § 802.4 — Voting securities of entities holding exempt assets: acquiring voting securities or non-corporate interests in an entity is exempt if the entity and all entities it controls consist entirely of exempt assets plus no more than $50 million in non-exempt assets.
• § 802.5 — Investment rental property: acquisitions of real property held solely for rental or investment purposes (not used by the acquiring person) are entirely exempt.
• § 802.6 — Federal agency premerger review: transactions requiring advance competitive review and approval by a federal regulatory agency (e.g., certain banking acquisitions reviewed by the Fed or FDIC, securities acquisitions reviewed by the SEC) are exempt to the extent they require that review — filing information with the agency serves as a substitute for the HSR notification.
• § 802.10 — Stock dividends, splits, and reorganizations: pro-rata stock dividends and splits are exempt. Conversions of a corporation or partnership to a new entity are exempt if no new assets are contributed and the acquiring person does not increase its percentage holdings.
• § 802.21 — Prior notification threshold: a follow-on acquisition of the same issuer's voting securities is exempt if the parties previously filed for an earlier acquisition of the same issuer, the waiting period has expired or been terminated, the new acquisition occurs within 5 years of that expiration, and the new acquisition would not cross a higher notification threshold than the earlier one.
• § 802.30 — Intraperson transactions: acquisitions in which the acquiring and acquired persons are the same "person" within the meaning of § 801.1(b)(1) (i.e., one controls the other or both are controlled by the same entity) are exempt.
• § 802.31 — Convertible voting securities: acquiring convertible securities themselves is always exempt regardless of dollar value — only a subsequent conversion that crosses a notification threshold may require filing.
• § 802.35 — Employee trusts: acquisitions of voting securities by an employer-controlled § 401 trust are exempt if the trust acquires voting securities of the employer or an entity within the same person.
• §§ 802.40–802.42 — Entity formation: formation of a tax-exempt non-profit under IRC §§ 501(c)(1)–(4), (6)–(20) or (d) is exempt. When an entity is formed (e.g., a joint venture), the new entity itself need not file — only the contributing persons file notification (if required). Where one contributor is exempt under § 7A(c)(8), remaining contributors may claim a partial exemption by filing a good-faith-intent affidavit with the FTC and DOJ at least 30 days before consummation.
• § 802.50 — Foreign assets: acquisitions of assets located outside the United States are exempt unless the foreign assets generated more than $50 million in U.S. sales in the acquired person's most recent fiscal year. Even if that threshold is crossed, transactions between two foreign persons with aggregate U.S. sales and U.S.-located assets both under $110 million are also exempt.
• § 802.51 — Foreign issuer voting securities: acquiring voting securities of a foreign issuer is exempt unless the issuer holds U.S.-located assets (excluding investment assets and securities) exceeding $50 million or made U.S. sales exceeding $50 million in the most recent fiscal year. By foreign persons acquiring a foreign issuer, the exemption applies unless the acquisition confers control and the issuer has more than $50 million U.S. nexus.
• § 802.52 — Foreign government acquisitions: exempt if the ultimate parent of either party is a foreign state and the acquisition is of assets within that state or securities of an entity organized under that state's laws.
• § 802.60 — Securities underwriters: acquisitions of voting securities by an underwriter in the ordinary course of an underwriting are exempt.
• § 802.63 — Creditors and insurers: acquisitions of collateral, acquisitions in foreclosure or upon default, and bona fide debt work-outs by creditors are exempt if made in the ordinary course of the creditor's business. Similarly, acquisitions by insurers pursuant to fidelity, surety, or casualty obligations are exempt.
• § 802.64 — Institutional investors (passive investment): banks, savings institutions, insurance companies, registered investment companies, broker-dealers, employee benefit trusts, and similar institutional investors are exempt when they acquire voting securities solely for the purpose of investment — i.e., without intent to participate in management or board decisions — up to 10% of an issuer's outstanding voting securities. (Some industries have a higher passive threshold.)
• § 802.65 — Financing transactions: acquisition of non-corporate interests (e.g., LLC membership interests or partnership interests) by a person contributing only cash for financing purposes is exempt if the agreement provides that the acquiring person loses control of the entity after realizing its preferred return.
• § 802.70 — Acquisitions subject to order: any acquisition made pursuant to an FTC order, FTC consent order accepted for public comment, or DOJ/FTC consent judgment submitted to a court is exempt.

In practice, M&A counsel apply Part 802 exemptions before even computing whether the size-of-transaction or size-of-person tests are met — because if any exemption applies, the filing requirement disappears entirely. The most frequently litigated exemptions are § 802.1 (ordinary course operating unit carve-back), § 802.50 and § 802.51 (foreign nexus), § 802.64 (institutional investor passive), and § 802.2 (real property).

Pending Legislation (119th Congress)

As of April 8, 2026, the more important current HSR story is administrative rather than legislative. The filing thresholds and fee schedule were updated by FTC notice in January 2026, and the agencies are evaluating the future shape of the HSR form after litigation over the 2025 updated form. This page should therefore be read as current-law process guidance rather than as a summary of an imminent statutory rewrite.

Recent Developments

• January 14, 2026 threshold and fee update: The FTC announced that the HSR size-of-transaction threshold increased from $126.4 million to $133.9 million, with related threshold and fee adjustments effective February 17, 2026.
• February 2026 form litigation changed filing practice: The FTC and DOJ stated on March 25, 2026 that a federal district court had vacated the updated HSR form that had taken effect in February 2025, and that the agencies were again accepting filings on the prior form while also accepting voluntary use of the updated form.
• March 25, 2026 public inquiry on the HSR form: The agencies launched a joint request for public comment on whether the updated form appropriately balances burden and usefulness, with comments due May 26, 2026.
• Early termination remains an active published process: The FTC currently maintains a searchable database and API for grants of early termination, which confirms that early termination is again part of normal HSR administration even though it is not automatic.