Hart-Scott-Rodino Act: Merger Filing Thresholds and Process

The Hart-Scott-Rodino Act requires companies to notify the Federal Trade Commission and Department of Justice before completing major acquisitions; the thresholds that trigger filing are adjusted annually and measured by the size of the acquiring company and the value of the transaction.

The Two-Part Filing Test

Hart-Scott-Rodino premerger notification applies when an acquisition meets either the “size of transaction” test or the “size of parties” test. The acquiring company must have annual net sales or total assets exceeding the statutory threshold (approximately $111.4 million in 2024, adjusted each January), and the target company must meet the same threshold. If both parties clear their respective minimums, the transaction itself triggers HSR unless it falls below the size-of-transaction figure (roughly $22.3 million in 2024). These dollar amounts rise annually in January in line with inflation, so every buyer and seller should verify the year’s thresholds before structuring a deal. Some transactions are exempt—for instance, acquisitions of goods or assets in the ordinary course of business, or certain foreign-to-foreign deals with minimal U.S. effect.

Annual Threshold Adjustments

Every January, the Securities and Exchange Commission updates the Hart-Scott-Rodino thresholds using a formula tied to changes in the gross domestic product price deflator. A company cannot assume last year’s numbers apply in a new calendar year. Deal teams must check the FTC’s HSR notification materials page before submitting filings or advising on deal-gating issues. Small differences in threshold updates have triggered inadvertent non-filing—a costly mistake, since violations can result in civil penalties per day of non-compliance.

The 30-Day Waiting Period and Extensions

Once both parties file their HSR notification, the waiting period begins. For 30 calendar days, the parties must hold and not close the transaction. During this time, the FTC and DOJ review the competitive impact of the deal. If either agency concludes that further investigation is needed, it can issue a Second Request (also called a Request for Additional Information and Documentary Material, or RIADM), which extends the waiting period by an additional 30 days and demands far more detailed financial, customer, and competitive data. A Second Request is not a rejection—it is a signal that deeper antitrust scrutiny is warranted. Parties commonly spend three to nine months responding to a Second Request before the agency either clears the deal with or without conditions, or challenges it in federal court.

Premerger Notification Contents

The HSR form requires both acquiring and target companies to disclose officers, directors, managers, beneficial owners, recent acquisitions, financial data, and product or service descriptions. The form asks detailed questions about market share, competitor lists, and the strategic rationale for the deal. If the parties have overlap in specific product lines, they must provide industry-specific competitive information. A minority of filings trigger Second Requests; the vast majority clear the initial 30-day window without objection, though enforcement trends vary by presidential administration.

Timing and Strategic Considerations

Because the 30-day waiting period runs from filing and not from announcement, savvy deal teams often delay HSR notification until due diligence and definitive agreements are ready to close. Filing too early can lock parties into a 30-day hold while negotiation terms remain uncertain. Conversely, waiting until closing conditions are nearly met ensures the waiting period runs closest to when deal closure is practical. The form itself takes two to four weeks for large transactions to prepare accurately, so counsel typically initiates the HSR process as soon as the acquisition is publicly announced or a definitive agreement is signed, depending on deal publicity and closing timing.

Enforcement Trends and Challenges

In recent years, the FTC and DOJ have become more aggressive in challenging larger horizontal mergers and scrutinizing vertical deals. High-profile technology and healthcare acquisitions have drawn prolonged Second Requests or legal challenges. The agencies now publish detailed merger reviews and competitive analyses that shape expectations for future deals. A company should consult antitrust counsel early if the target company competes directly in the buyer’s markets, if either party has substantial market share, or if recent regulatory guidance suggests sensitivity to the particular industry. HSR filing is not a rubber stamp—it is the formal trigger for antitrust examination.

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