Most business owners only encounter Hart-Scott-Rodino (HSR) after a transaction is already underway—when timing pressure is highest and surprises are most costly. In this article, we discuss the process and implications of the HSR Act on business transactions.
The HSR Act: Regulatory Framework for Larger Transactions
The Hart-Scott-Rodino (HSR) Antitrust Improvements Act is a federal law that requires certain business transactions to be reported to the U.S. Government before they can close. The Federal Trade Commission (FTC) and Department of Justice (DOJ) review these filings to make sure the deal will not harm competition. For most middle-market transactions, HSR operates as a procedural checkpoint rather than a substantive impediment.
2026 HSR Filing Thresholds
Every year, the U.S. Government adjusts the dollar amounts that trigger a filing requirement. This requirement involves using a size-of-person (SOP) test that qualifies transactions based on their size, considering net sales or assets. Below are the numbers for 2026, effective February 17, 2026.
-
Transactions below $133.9M
-
No HSR filing required
-
Below the HSR size-of-transaction threshold
-
-
Transactions between $133.9M and $535.5M
-
HSR filing required only if the size-of-person (SOP) test is met
-
SOP test: one party has ≥ $267.8M in total assets or net sales and the other has ≥ $26.8M
-
Many middle-market transactions fall in this range but do not trigger an HSR filing
-
-
Transactions above $535.5M
-
HSR filing is mandatory
-
Size-of-person test does not apply
-
Post-Filing Process and Waiting period
Once both the buyer and seller submit their HSR forms, a 30-day waiting period begins. During this time, the deal cannot close and the teams cannot begin to merge operations. In most cases, the waiting period expires without agency action and the transaction can proceed to closing.
Second Requests: Timing and Practical Impact
If regulators identify potential competitive concerns, they may issue a Second Request and require extensive additional document production and materially extending timelines and costs.The good news is that Second Requests are uncommon for middle-market deals, especially in industries with many competitors and no clear market dominance concerns. In 2024, only 59 Second Requests were issued across 1,973 reportable transactions (~3%)[1].
Substantive Antitrust Review Criteria
The review by regulators focuses on whether a deal would harm competition. They look at whether the transaction would:
- Reduce competition in defined product or geographic markets
- Increase pricing power post-transaction
- Create market concentration excessively
- Eliminate future competitive entrants
- Facilitate coordinated behavior among remaining competitors
If the business in question operates in a competitive and fragmented market, this review is typically not an issue. The agencies recognize that most deals do not threaten competition.
Filing Fees
The filing fee depends on the transaction size. The 2026 fee schedule ranges from $35K to $2.46M based on deal value. Transaction counsel typically calculates the applicable fee and coordinates submission as part of closing mechanics.
Implications for Transaction Timing
Every deal is different, but here are three common scenarios to help plan.
- No HSR Required: The transaction value is below $133.9M, or it falls between $133.9M and $535.5M but does not meet the SOP test. The transaction can proceed toward closing on the negotiated timeline.
- HSR Required, No Competitive Overlap: This is the most common situation for middle-market deals in fragmented industries. Expect a 30-day waiting period, with the possibility of early termination in 10 to 15 days. Build this window into the closing schedule.
- Competitive Overlap in Concentrated Markets: The agencies may want more information. Plan for the standard 30-day period plus additional time if a Second Request is issued. The transaction advisors should help prepare materials and respond efficiently.
Crewe Capital’s Approach
We treat HSR as part of a disciplined deal architecture—not an administrative afterthought. Before launch, we assess filing exposure, model timeline implications, and coordinate closely with transaction counsel to eliminate surprises and preserve momentum through closing.
If you are evaluating a sale or recapitalization and want clarity on how regulatory requirements affect execution, we’re available for a confidential discussion.
[1] Source: FTC/DOJ HSR Annual Report to Congress, FY2024.
