Hart-Scott-Rodino: Thresholds, Waiting Period, and Penalties

Hart-Scott-Rodino filing requirements apply when a merger or acquisition crosses federal size thresholds set each year by the Federal Trade Commission. For deals closing in 2026, transactions valued above $133.9 million can trigger a mandatory notification to both the FTC and the Department of Justice Antitrust Division, followed by a waiting period before the parties can close.¹ The Hart-Scott-Rodino Antitrust Improvements Act of 1976 built this system on a simple premise: unwinding a completed merger is far harder than pausing a problematic one before it closes.

Is Your Deal Reportable

Two jurisdictional tests under 15 U.S.C. § 18a decide whether a transaction requires a filing.²

The Size of Transaction test measures the total value of the voting securities, non-corporate interests, or assets being acquired. In 2026, deals valued below $133.9 million are generally not reportable. Deals above $535.5 million almost always require a filing, whatever the size of the parties.¹

Deals falling between those two figures must also satisfy the Size of Person test. Typically, one party must have total assets or annual net sales of at least $267.8 million while the other has at least $26.8 million.¹ When both tests are met, buyer and seller each submit their own notification form. The exception is a cash tender offer, where only the acquiring company files.²

These figures are not fixed. The FTC adjusts them every year, typically in February, based on changes in Gross National Product. The thresholds in effect at closing are the ones that govern, so a deal that looked reportable at signing can become non-reportable if the numbers move enough before closing.¹

Exemptions That Can Take a Deal Out of Scope

A deal can clear the dollar thresholds and still avoid filing if an exemption applies. Because filings are expensive and slow, checking the exemptions early is worthwhile.

Investment-Only Acquisitions

A buyer that will hold 10% or less of a company’s voting securities and has no intention of influencing business decisions does not have to file.³ The FTC reads this narrowly. If the buyer later tries to shape corporate strategy, the exemption was never valid to begin with.

Institutional investors such as mutual funds and insurance companies get a bit more room, up to 15% of outstanding voting securities, provided the acquisition stays passive.⁴

Real Estate and Ordinary-Course Purchases

Purchases of office buildings and residential property are exempt.⁵ So are purchases of goods in the ordinary course of business, meaning inventory, raw materials, or supplies bought to use or resell. Buying all or substantially all of the assets of a distinct operating business does not qualify.⁶

Deals Reviewed by Other Regulators

Transactions already subject to antitrust review by another federal agency, such as bank acquisitions and airline mergers, are exempt to avoid duplicate review.⁷ Foreign transactions with minimal U.S. sales or assets often fall outside the filing requirement as well.⁸

What Goes Into the Filing

The Notification and Report Form pulls a lot of information from both parties: recent annual reports, audited financial statements, and revenue breakdowns by business line. Forms and instructions come from the FTC’s Premerger Notification Program.⁹

The most time-consuming piece is usually gathering Item 4 documents. These are internal memos, board presentations, and analyses prepared for officers or directors that evaluate the deal’s impact on competition, market share, or growth.¹⁰ Investment committee memoranda are a classic example. They typically discuss why the target is attractive, how it fits the buyer’s operations, and how the market would shift after closing. Anything touching competition, competitors, or market share in the deal context is likely responsive, and underproducing these documents is a common source of trouble with the agencies.

Filing Fees for 2026

Fees are tiered by transaction size:

Less than $189.6 million: $35,000
$189.6 million to under $586.9 million: $110,000
$586.9 million to under $1.174 billion: $275,000
$1.174 billion to under $2.347 billion: $440,000
$2.347 billion to under $5.869 billion: $875,000
$5.869 billion or more: $2,460,000

The fee is set by the deal’s value at the time of filing, not at signing or closing, and the fee tiers adjust each year alongside the jurisdictional thresholds.¹¹

The 30-Day Waiting Period

Once both parties submit completed forms and fees, a mandatory waiting period begins. For most transactions it is 30 calendar days. Cash tender offers and bankruptcy sales get a shorter 15-day window.¹² During the wait, the parties cannot close or transfer control of the target’s operations.

If neither agency finds competitive concerns, they can grant early termination, letting the parties close before the 30 days run out.¹³ Both agencies must agree. Availability of early termination has been uneven since the FTC suspended the practice in 2021, so deal timelines should not depend on it.

Pull and Refile

When a party senses a Second Request coming before one is issued, it can withdraw the filing and resubmit to restart a fresh 30-day clock. The maneuver buys time to provide additional information voluntarily and possibly address the agencies’ concerns. It can be used only once per transaction, refiling must happen within two business days of withdrawal, and the option disappears once a Second Request has actually been issued.¹⁴

Second Requests

If the initial review raises competitive concerns, the investigating agency can issue a Second Request, a formal demand for more documents and information that freezes the deal until the parties substantially comply.¹⁵ At that point, HSR review turns into a full investigation.

Second Requests are rare compared with total filings, but they are expensive and disruptive. Companies routinely spend millions on attorneys, document review, and e-discovery. Executives may sit for sworn depositions. The process usually runs months rather than weeks. Once the parties certify substantial compliance, a new 30-day waiting period begins before closing.¹⁵

A Second Request is not a death sentence for a deal. Many transactions still close, sometimes with divestiture conditions and sometimes without any changes. But the cost and delay lead some parties to walk away rather than push through. If an agency concludes the deal would substantially lessen competition, it can seek a preliminary injunction in federal court and may open its own administrative proceeding; consent decrees requiring divestitures are a common way disputed deals get resolved.¹⁶

Gun-Jumping During the Wait

Filing is only half the obligation. The other half is respecting the waiting period by keeping the two companies operationally separate until the deal clears. Exercising control over the target or coordinating competitively sensitive activities before the waiting period ends is a standalone HSR violation. It does not matter whether the merger itself would have been approved.

The conduct that gets companies in trouble is more granular than deal teams often expect. Directing the target’s vendor choices, requiring the buyer’s approval for routine spending, pulling the target’s customer contracts or pricing data into the buyer’s own operations, or pausing the target’s development projects based on the buyer’s preferences can all cross the line.

In January 2025, the FTC imposed a record $5.6 million civil penalty on a group of crude oil producers that exercised operational control over target assets for roughly 94 days before their deal closed, a signal that even structures billed as “interim” involvement can violate the Act.

Penalties for Failing To File

Closing a reportable deal without filing exposes the companies to civil penalties that can exceed $50,000 per day of non-compliance.¹⁷ The amount is adjusted each year for inflation, and it accrues for every day the violation continues, so a deal that closes without a filing and sits unreported for months can generate millions in penalties before anyone contacts the agency.

The FTC’s Premerger Notification Office points to two scenarios that come up over and over: executives whose personal stock purchases quietly cross the reporting threshold, and incremental acquisitions where a series of smaller purchases eventually push total holdings past the trigger.¹⁸ In either case, the government can require a post-consummation filing and pursue penalties. It can also seek to unwind a completed transaction if the deal proves anticompetitive.

Self-reporting a missed filing generally produces a better outcome than waiting for the agency to notice, but it does not eliminate penalties. A company that discovers a possible filing obligation after closing should contact antitrust counsel right away, because the per-day clock keeps running until the situation is resolved.

1
Federal Trade Commission. New HSR Thresholds and Filing Fees for 2026
2
Office of the Law Revision Counsel. 15 USC 18a – Premerger Notification and Waiting Period
3
Federal Trade Commission. Investment-Only Means Just That
4
eCFR. 16 CFR 802.64 – Acquisitions of Voting Securities by Certain Institutional Investors
5
eCFR. 16 CFR 802.2 – Certain Acquisitions of Real Property Assets
6
eCFR. 16 CFR 802.1 – Acquisitions of Goods in the Ordinary Course of Business
7
Federal Trade Commission. Formal Interpretation 17 – Banking and Non-Banking Businesses
8
eCFR. 16 CFR Part 802 – Exemption Rules
9
Federal Trade Commission. HSR Notification Forms, Instructions and Guidance
10
Federal Trade Commission. Item 4(c) Tip Sheet
11
Federal Trade Commission. Filing Fee Information
12
Federal Trade Commission. Premerger Notification and the Merger Review Process
13
Federal Trade Commission. About Early Termination Notices
14
eCFR. 16 CFR 803.12 – Withdraw and Refile Notification
15
Federal Trade Commission. Merger Review
16
Federal Trade Commission. Negotiating Merger Remedies
17
Federal Trade Commission. FTC Publishes Inflation-Adjusted Civil Penalty Amounts for 2024
18
Federal Trade Commission. Common Failure to File Scenarios