What is the Hart-Scott-Rodino Act?
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, universally shortened to HSR, created the U.S. premerger notification program. Parties to reportable transactions must file with the Federal Trade Commission and the Department of Justice, pay a filing fee, and observe a waiting period before closing.
The point of the statute is sequencing. Before HSR, antitrust enforcers could only challenge anticompetitive mergers after they closed, when unwinding them was messy and often pointless. HSR moved review in front of closing: the agencies see the deal, and the clock, before the assets change hands. Most filings clear without incident. A small fraction draw a Second Request, the agencies’ demand for documents and data that suspends closing until the parties substantially comply.
What are the HSR thresholds for 2026?
The FTC adjusts the thresholds every year based on GNP growth. The 2026 figures took effect February 17, 2026.
| Test | 2026 threshold | What it means |
|---|---|---|
| Size of transaction, minimum | $133.9 million | Deals below this value are not reportable |
| Size of persons | $267.8 million and $26.8 million | For deals between $133.9M and $535.5M, one party must have sales or assets of $267.8M+ and the other $26.8M+ |
| Size-of-persons cutoff | $535.5 million | Deals above this value are reportable regardless of party size |
Filing fees are tiered by transaction value. For 2026 the fee starts at $35,000 for deals below $189.6 million and rises through six tiers to $2.46 million for transactions of $5.869 billion or more. By convention the buyer usually pays it, though the parties can allocate it in the purchase agreement.
The filing itself got heavier in 2025. The FTC’s overhauled HSR rules, the first major rewrite of the form in the program’s history, took effect in February 2025 and require substantially more narrative detail: descriptions of deal rationale, overlapping products and services, supply relationships, and additional transaction documents. Preparing a filing that once took days now takes weeks, which matters for deal timelines.
How does the waiting period work?
Filing starts a 30-day waiting period, 15 days for all-cash tender offers and certain bankruptcy sales. Three things can happen. The period expires and the parties close. The agencies grant early termination, a discretionary shortcut that has been used sparingly in recent years. Or an agency issues a Second Request, which suspends the clock until both parties substantially comply with a document and data demand that can run to millions of pages, after which a final waiting period runs. Second Requests turn a 30-day formality into a review measured in months, and they are the reason purchase agreements in reportable deals negotiate antitrust efforts covenants, termination dates, and sometimes reverse break fees.
One more rule bites before closing: gun-jumping. The parties must continue operating as independent companies until the waiting period ends. Coordinating prices, swapping competitively sensitive data outside a clean-room process, or the buyer directing the seller’s business before closing can draw penalties even when the merger itself is lawful.
When does HSR matter in a founder-led sale?
Run the numbers and the answer is: less often than founders fear, but decisively when it does. A sale below $133.9 million is simply not reportable in 2026, which covers most transactions in the lower middle market. No filing, no fee, no waiting period, no agency review.
Three situations pull a founder-led deal into HSR territory. The deal itself clears the threshold, which happens at the upper end of the $5 million to $300 million band where the firm works. Aggregation catches it: the size-of-transaction test counts what the buyer will hold as a result of the acquisition, so a sponsor topping up an existing platform stake can cross the line on a smaller check. Or the transaction is one step in a larger roll-up where the buyer files strategically. In each case the practical consequences are the same: four to eight weeks of extra timeline, a filing fee in the price negotiation, gun-jumping discipline on information sharing, and covenant language in the agreement about who bears antitrust risk. Those are process items, and a prepared sell-side process maps them at the letter-of-intent stage rather than discovering them in legal review. The interaction with exclusivity in a letter of intent matters too: every week of regulatory timeline is a week the seller sits locked up with one buyer, which is an argument for settling the filing plan before signing exclusivity.
Questions founders ask
What is the Hart-Scott-Rodino Act?
HSR is the 1976 statute behind the U.S. premerger notification program. Parties to reportable deals file with the FTC and DOJ, pay a fee, and wait, normally 30 days, before closing, so the agencies can review competition concerns before the deal happens.
What is the HSR threshold for 2026?
The minimum size-of-transaction threshold is $133.9 million, effective February 17, 2026. Between $133.9 million and $535.5 million the size-of-persons test also applies, generally $267.8 million and $26.8 million. Above $535.5 million every deal is reportable.
How long is the HSR waiting period?
Thirty days from filing, or 15 for cash tender offers and certain bankruptcy sales. A Second Request suspends closing until the parties substantially comply, which can add months.
Do lower middle market deals require an HSR filing?
Most do not, because they close below the size-of-transaction threshold. Deals at the top of the range, and smaller acquisitions that cross the line through the buyer’s aggregated holdings, do file, and the analysis is run early in any serious process.
Published August 25, 2026 by Jeff Barrington, Founder and Managing Director, Windsor Drake. Content on this page may be cited with attribution and a link to https://windsordrake.com/hart-scott-rodino-act/