Taxation and Regulatory Compliance

What Is an HSR Filing and When Is It Required?

Navigate the essential regulatory steps for significant business transactions. Learn when and how HSR premerger notification is required for antitrust review.

The Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 is a federal law regulating mergers, acquisitions, and other transactions to ensure fair competition in the United States. It provides the U.S. antitrust enforcement agencies—the Federal Trade Commission (FTC) and the Department of Justice (DOJ)—an opportunity to review deals before completion. This mandatory premerger notification program allows regulators to identify and challenge transactions that could harm competition or create monopolies.

Transactions Requiring Notification

An HSR filing is required when a transaction meets specific financial thresholds, primarily through a “size of transaction” test and, in some cases, a “size of parties” test. These thresholds are adjusted annually. For 2024, a transaction must generally be valued at more than $119.5 million to meet the “size of transaction” test. If the transaction value is above $119.5 million but not more than $478 million, it is reportable only if the “size of parties” test is also met. Transactions valued at more than $478 million are reportable regardless of the parties’ size, unless an exemption applies.

The “size of parties” test for 2024 generally requires one party to the transaction to have annual net sales or total assets of at least $239 million, and the other party to have at least $23.9 million. The “acquiring person” is the entity holding the voting securities, assets, or non-corporate interests after acquisition, while the “acquired person” is the entity whose interests are being acquired. Common transactions covered include asset acquisitions, stock acquisitions, mergers, and joint venture formations.

Information for the HSR Notification

Before an HSR notification can be filed, substantial information and documentation must be gathered for the HSR Form, also known as Form C4, Premerger Notification Form. This form requires identification of both the acquiring and acquired persons involved in the transaction, including their ultimate parent entities.

Detailed financial information is necessary, such as revenue data categorized by North American Industry Classification System (NAICS) codes for all U.S. revenues. Filers must provide revenues by NAICS code for the most recent fiscal year, identifying the six-digit codes that describe their U.S. operations. The form also requires competitive overlap information, specifically identifying NAICS codes where both parties derive revenues, including estimates of revenue ranges and an indication of whether the other party also reports revenue under the same code.

Copies of certain transaction-related documents must be submitted, including the definitive agreement, term sheets, and relevant board resolutions. Any studies, analyses, or reports prepared by or for officers or directors regarding the transaction’s competitive aspects, market shares, or efficiencies must also be provided. The collected information directly populates the various sections of the HSR Form, ensuring that the antitrust agencies receive a comprehensive view of the proposed transaction and its potential market impact.

Submitting the HSR Notification

Once the HSR Form is completed, a filing fee must be paid. This fee operates on a tiered structure based on the transaction value and is adjusted annually. For transactions valued between $119.5 million and $173.3 million, the fee is $30,000; for those between $173.3 million and $536.5 million, it is $105,000; for transactions valued between $536.5 million and $1.073 billion, the fee is $260,000. For transactions valued at $1.073 billion or more, the fee can range up to $2.335 million.

Submission is electronic, typically through a secure file transfer portal like Kiteworks. Filings sent through this system are delivered to both the FTC and DOJ premerger offices. Filings received after 5 PM EST are considered submitted on the next business day. The waiting period officially begins upon the antitrust agencies’ receipt of a complete filing from both the acquiring and acquired parties.

The Waiting Period and Review Process

Following a complete HSR notification submission, a statutory waiting period commences for preliminary antitrust review by the FTC and DOJ. For most transactions, this initial waiting period is 30 calendar days. For cash tender offers and certain bankruptcy filings, the period is shortened to 15 days. If the final day falls on a weekend or federal holiday, the expiration is extended to the next business day.

The purpose of this period is to allow the agencies to assess whether the proposed transaction raises competitive concerns. Parties may seek early termination of the waiting period, which can be granted if both agencies complete their review and determine no enforcement action is necessary. While early termination has been subject to temporary suspensions in the past, it is a mechanism that allows transactions to close sooner.

If the initial review raises concerns, one of the agencies may issue a “Second Request,” a formal request for additional information and documents. This stops the initial waiting period and significantly extends the review timeline. After parties substantially comply with the Second Request, a new waiting period begins, typically another 30 days, or 10 days for cash tender offers and bankruptcy sales. Outcomes of the review can range from clearance to a negotiated settlement, such as a divestiture, or a challenge to the transaction in federal court through an injunction.

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