Hart-Scott-Rodino HSR Threshold: Filing Triggers and Waiting Periods

Key Takeaways

• The 2026 HSR size-of-transaction threshold is $133.9 million; deals above this level require premerger notification and a 30-day waiting period before closing.
• HSR reaches beyond traditional mergers to include acquisitions of voting securities and asset purchases; a secondary-market block purchase of voting stock can trigger filing obligations.
• A Second Request can extend the waiting period from 30 days to six to twelve months, making HSR clearance timeline one of the most material M&A execution risks above the threshold.
• Integration activities before the waiting period expires, sharing pricing data, combining sales teams, constitute gun-jumping under Section 7A and can trigger significant civil penalties.

What It Is

Hart-Scott-Rodino, commonly shortened to HSR, is codified at Section 7A of the Clayton Act. It sets up a premerger notification regime that applies to acquisitions of voting securities, assets, or non-corporate interests above specified dollar values. A filing triggers a waiting period, ordinarily 30 calendar days for most deals and 15 for cash tender offers, during which the FTC or DOJ can issue a Second Request for additional information.

The notification duty sits with both the acquiring person and the target. Filing fees are paid by the acquirer. HSR is a jurisdictional regime, not an approval regime. Most filings clear the waiting period without further action, but the filing itself is mandatory when the thresholds are met.

The Intuition

Congress built HSR to give antitrust enforcers a chance to examine deals before they close rather than after the corporate combinations are already entangled. Blocking a closed deal is an order of magnitude harder than blocking a pending one, because assets get mixed, employees reassigned, and trade secrets shared.

The dollar thresholds exist to focus the system on deals big enough to raise competitive concerns. Routine acquisitions and ordinary-course stock purchases should not clog the enforcement pipeline. Because the relevant economic scale changes every year, the thresholds are indexed and updated annually by the FTC each January.

How It Works

Three thresholds drive the filing question. The size-of-transaction test asks whether the acquirer will hold voting securities, assets, or non-corporate interests valued above the current threshold after the deal. The size-of-person test asks whether one party has at least a specified level of sales or assets and the other party meets a smaller threshold. A third size-of-transaction above the upper threshold test is a standalone filing trigger, regardless of the size-of-person test.

For 2026, the FTC announced that the size-of-transaction threshold rises from $126.4 million (the 2025 level) to $133.9 million. The updated size-of-person thresholds require, for transactions valued between $133.9 million and $535.5 million, that one party have total assets or annual net sales of at least $267.8 million and the other party have at least $26.8 million. Transactions valued above $535.5 million are reportable without regard to the size-of-person test, subject to exemptions.

The 2026 thresholds become effective for deals closing on or after February 17, 2026, which is 30 days after publication in the Federal Register. Filing fees are tiered by transaction size, ranging from a few tens of thousands of dollars for the smallest reportable deals to $2.46 million for the largest.

The standard 30-day waiting period runs from the date both parties have submitted complete filings. A Second Request extends the waiting period until both parties have substantially complied, which in complex reviews can add six to twelve months or more.

Worked Example

Assume a publicly traded technology acquirer with $3 billion in annual revenues agrees to buy a private software company for $250 million in cash. Because the transaction value exceeds the 2026 size-of-transaction threshold of $133.9 million, and both parties meet the size-of-person thresholds ($267.8 million and $26.8 million respectively), the deal is HSR reportable.

The acquirer files its HSR Notification and Report Form with the FTC and DOJ and pays the applicable filing fee tiered to the $250 million transaction value. The target files its own notification the same day. The 30-day waiting period begins on the latter of the two filing dates.

If neither agency issues a Second Request by day 30, the parties may close after 11:59 p.m. on the 30th day. If a Second Request arrives on day 25, the timetable extends materially, often by several months, while the acquirer produces transaction documents, market analyses, and custodian files responsive to the request.

Common Mistakes

1. Assuming only mergers trigger HSR. The statute reaches voting-security acquisitions, asset acquisitions, and non-corporate interest acquisitions. A simple secondary purchase of a large block of voting stock can trigger HSR if the resulting holding exceeds the size-of-transaction threshold, even when no merger is involved.

2. Forgetting the annual threshold adjustment. Transactions priced around the threshold during January must confirm which year's threshold applies. The 2026 thresholds only apply to deals closing on or after February 17, 2026. Deals closing before that date are judged against the 2025 thresholds.

3. Overlooking aggregation across related deals. HSR aggregates holdings within a fiscal year. A series of small purchases that individually fall below the threshold can collectively trigger filing obligations once cumulative value crosses the line.

4. Missing the investment-only exemption limits. The investment-only exemption from HSR reporting applies only to acquisitions of up to 10 percent of voting securities held with no intent to participate in management. Crossing 10 percent or taking any active role in the business ends the exemption.

5. Underestimating gun-jumping risk. Integration activities before the waiting period expires, such as sharing competitively sensitive pricing data or combining sales forces, can constitute gun-jumping under Section 7A and trigger significant civil penalties. HSR counsel police the pre-closing period carefully.

Frequently Asked Questions

Q: What are Hart-Scott-Rodino thresholds in simple terms? HSR thresholds are the dollar values that determine whether a merger or acquisition is large enough to require a mandatory pre-closing government review. For 2026, any deal worth more than $133.9 million where both parties meet size-of-person tests must be filed with the FTC and DOJ, and the parties must wait at least 30 days before closing.

Q: How do Hart-Scott-Rodino thresholds affect investment decisions? For investors analyzing an announced M&A deal, HSR filing status tells you whether regulatory clearance is a realistic closing condition or a timing certainty. A Second Request extending the waiting period by six to twelve months materially changes the deal's risk-arbitrage profile, cost of carry, and probability of closing.

Q: What is a real-world example of Hart-Scott-Rodino thresholds? A $3 billion technology acquirer agreed to buy a private software company for $250 million. The deal exceeded the 2026 $133.9 million threshold and both parties met size-of-person tests, so both filed on the same day. With no Second Request by day 30, they closed. Had a Second Request arrived on day 25, they would have needed several more months of document production before the waiting period reset.

Q: How can investors use knowledge of HSR thresholds? Monitoring FTC and DOJ public merger filings for Second Requests on announced deals affecting portfolio companies gives early warning of extended closing timelines. In risk arbitrage positions, the presence or absence of a Second Request is the single most important indicator of whether a deal closes on schedule.

Q: How is Hart-Scott-Rodino different from Schedule 13D reporting? HSR is a premerger antitrust notification regime, it applies when a transaction reaches a dollar threshold, regardless of the buyer's intent. Schedule 13D is a securities disclosure requirement that applies when any buyer exceeds 5% of voting equity with a control or influence purpose. Both can apply to the same large acquisition simultaneously under entirely different legal frameworks.

Sources

1. Federal Trade Commission. "New HSR Thresholds and Filing Fees for 2026." https://www.ftc.gov/enforcement/competition-matters/2026/01/new-hsr-thresholds-filing-fees-2026
2. Federal Trade Commission. "FTC Announces 2026 Update of Jurisdictional and Fee Thresholds for Premerger Notification Filings." https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-announces-2026-update-jurisdictional-fee-thresholds-premerger-notification-filings
3. Mayer Brown. "FTC Ups HSR Act Thresholds in 2026 Annual Update." https://www.mayerbrown.com/en/insights/publications/2026/01/ftc-ups-hsr-act-thresholds-in-2026-annual-update
4. Latham and Watkins. "Annual HSR Threshold Adjustments Announced for 2026." https://www.lw.com/en/insights/annual-hsr-threshold-adjustments-announced-for-2026

Disclaimer

This article is educational content only and is not financial advice. Nothing here is a recommendation to buy, sell, or hold any security. Consult a licensed advisor before making investment decisions.