Middle-market dealmakers have had to absorb a rare dose of Hart-Scott-Rodino whiplash. For decades, HSR analysis was a familiar threshold exercise that usually sat near the end of a deal checklist: determine the size of transaction, confirm the size-of-person test when applicable, evaluate exemptions, file if necessary, and build the waiting period into the closing calendar. That exercise has become less predictable. In 2026, the HSR thresholds increased again, moving the basic size-of-transaction threshold to $133.9 million for transactions closing on or after February 17, 2026. At the same time, the filing process itself has been unsettled by the rise and fall of the expanded HSR form that took effect in February 2025 and was later vacated by a federal district court in February 2026. The result is an unusual compliance environment: the filing line has moved upward, the form requirements have reverted for now, and antitrust scrutiny remains active even for deals that never trigger an HSR filing. ¹
The practical lesson for middle-market M&A is that “not reportable” does not mean “not reviewable,” and it certainly does not mean “not risky.” HSR is a premerger notification statute. It determines when parties must notify the Federal Trade Commission and the Department of Justice before closing and observe a statutory waiting period. It does not define the outer limits of antitrust law. A transaction can fall below the HSR filing threshold and still raise competitive issues under Section 7 of the Clayton Act, Section 1 or Section 2 of the Sherman Act, state antitrust statutes, or unfair competition principles. For buyers, sellers, lenders, and investors operating in the middle market, this distinction matters because many deals are purposely or naturally sized below the filing threshold but may still affect concentrated local markets, specialized product categories, essential suppliers, health care delivery, labor pools, franchise systems, data assets, or serial acquisition strategies.
The new 2026 HSR thresholds should be understood first as a jurisdictional screen. The minimum size-of-transaction threshold, historically referred to as the $50 million threshold as adjusted, is now $133.9 million. Transactions valued above that amount may be reportable if the other statutory requirements are satisfied and no exemption applies. For transactions valued above $133.9 million but not above $535.5 million, the size-of-person test remains important. In general terms, the parties must satisfy adjusted size-of-person thresholds, now $26.8 million and $267.8 million, depending on the structure and parties involved. Transactions valued above $535.5 million generally do not require satisfaction of the size-of-person test, although exemptions and valuation rules still matter. ²
The filing fee schedule also changed for 2026, and it can affect transaction budgeting in ways that are easy to overlook. The lowest fee tier is now $35,000 for reportable transactions below $189.6 million. The next tiers rise to $110,000, $275,000, $440,000, $875,000, and finally $2.46 million for transactions valued at $5.869 billion or more. For many middle-market transactions, the fee itself may not drive deal economics, but it can influence timing, responsibility for regulatory costs, and purchase agreement drafting. The fee question should be separated from the threshold question because the FTC’s guidance treats reportability by reference to the threshold in effect at closing, while the filing fee is based on the value of the transaction at the time the waiting period begins, which is usually the time of filing. ¹
That timing distinction creates a subtle but important issue for deals signed or negotiated near the effective date of new thresholds. A transaction valued at $130 million may have been above the 2025 minimum size-of-transaction threshold, but it is below the 2026 threshold if it closes on or after February 17, 2026. In that circumstance, the updated threshold can determine whether a filing is required at all. For transactions near the line, parties should not rely on a stale threshold memo, a prior year precedent, or a banker’s shorthand. HSR thresholds are adjusted annually, and a deal team that treats last year’s numbers as current can misstate filing obligations, closing conditions, and outside dates. ¹
The vacated form development is the other half of the whiplash. In late 2024, the FTC issued a final rule that substantially revised the HSR premerger notification form and instructions. The agency described the revisions as an effort to update the premerger review process in light of changes in corporate structures, investment arrangements, acquisition strategies, and market dynamics. The expanded form required more information about the transaction, the parties, ownership structure, competitive overlaps, supply relationships, transaction rationale, prior acquisitions, certain officers and directors, foreign subsidies, and other matters. The final rule was published in the Federal Register in November 2024 and took effect in February 2025.³
For roughly a year, deal parties and counsel adjusted to the expanded form. That adjustment was not merely clerical. The expanded form required more narrative work, more internal document collection, more coordination across business units, and more early antitrust analysis. In many cases, parties had to begin preparing HSR materials earlier in the deal process because the form itself required information that previously may have been developed only if the agencies opened a more serious investigation. Even when a transaction did not present obvious competitive risk, the expanded form could require a more detailed description of overlaps, supply relationships, transaction rationale, and management-level materials. ³
The burden became a central issue in the litigation challenging the rule. In Chamber of Commerce v. FTC, the United States District Court for the Eastern District of Texas vacated the 2024 rule. The court concluded that the FTC had not shown that the rule’s claimed benefits reasonably outweighed its significant and widespread costs, and it held that the rule was not “necessary and appropriate” within the meaning of the HSR Act. The court also found the rule arbitrary and capricious because, in the court’s view, the agency did not adequately substantiate the benefits of the expanded requirements or explain its rejection of less burdensome alternatives.⁴
The court’s opinion is significant not only because it changed the form currently in use, but because it framed the policy debate over premerger notification. The FTC’s position was that the prior form did not give the agencies enough information to identify potentially illegal mergers during the short statutory waiting period. The challengers argued that the expanded form imposed broad burdens on all reportable transactions, including deals that posed little or no competitive concern. The court sided with the challengers and vacated the rule. As of the FTC’s current public guidance, the agency is accepting HSR filings using the form and instructions that were in place before the February 10, 2025 effective date of the expanded rule. The FTC has also stated that filings must be submitted electronically through Kiteworks and that it will continue to accept filings prepared under the February 2025 form and instructions if parties voluntarily choose to submit them.⁵
For middle-market deal teams, this procedural history may feel like a regulatory detour, but it has immediate practical consequences. A deal that is reportable today may be less burdensome to file than it was during the expanded-form period, but the diligence habits developed during that period should not simply be discarded. The agencies’ interest in transaction rationale, competitive overlaps, supply relationships, prior acquisitions, ownership rights, and management-level documents has not disappeared. Those topics remain central to merger analysis, and they are often exactly the topics that determine whether a deal will attract scrutiny even below the HSR line.
That is why the phrase “below the filing line” can be misleading. The HSR threshold is not a safe harbor. It is an administrative trigger for mandatory pre-closing notice. Antitrust agencies can investigate consummated transactions, non-reportable transactions, and patterns of acquisitions. State attorneys general, customers, competitors, suppliers, and private plaintiffs may also raise concerns. A lower-middle-market transaction in a concentrated niche can present more practical antitrust risk than a larger transaction in a fragmented national market. The dollar value of a deal is therefore only one proxy, and often an imperfect one, for competitive significance.
The most common mistake in middle-market antitrust diligence is treating HSR as a binary yes-or-no question and stopping the analysis once the answer appears to be no. That approach may be efficient in a routine, non-overlap deal, but it is not enough where the buyer and target compete, sell complementary products, rely on each other as suppliers or customers, operate in concentrated local markets, employ specialized labor, or participate in a roll-up strategy. In those circumstances, antitrust diligence should begin before the purchase agreement is signed, not after a filing question is escalated.
The first diligence question should be the commercial rationale for the transaction. Every deal has a business story, and antitrust risk often turns on how that story is told in board materials, investment committee decks, management presentations, lender materials, and integration plans. A buyer may view the acquisition as a way to expand capacity, enter a new geography, add talent, improve distribution, or achieve operational efficiencies. Those rationales can be procompetitive. But documents that describe the same deal as eliminating a disruptive competitor, stabilizing prices, controlling supply, disciplining a market, or preventing customer switching can create serious problems. The words used internally may become the words regulators quote externally.
The second diligence question is whether the parties actually compete. In the middle market, competition may not be obvious from broad industry labels. Two companies may both be described as “industrial services” businesses but operate in different customer segments, contract sizes, technical specialties, or geographies. Conversely, two businesses may appear different on paper but compete for the same customers, the same contracts, the same referral sources, or the same skilled employees. A useful antitrust review should therefore examine revenue by product line, customer type, geography, sales channel, and bidding history rather than relying solely on NAICS codes or high-level descriptions.
The third diligence question is whether the deal creates vertical or supply-chain concerns. Many middle-market acquisitions are not straightforward horizontal combinations. A buyer may acquire a supplier, distributor, dealer, software platform, data source, repair network, physician group, logistics provider, or specialty manufacturer. Those deals can raise questions about foreclosure, access to inputs, access to customers, interoperability, confidential information, or discriminatory treatment of rivals. A transaction that does not reduce the number of direct competitors may still affect competition if it gives the combined firm the ability or incentive to disadvantage rivals.
The fourth diligence question is whether the transaction is part of a broader acquisition pattern. Roll-up strategies are common in the middle market because fragmented sectors often attract private equity, family offices, independent sponsors, and strategic consolidators. A single non-reportable acquisition may look modest in isolation. A series of similar acquisitions, however, can change local or niche market structure over time. Antitrust agencies have increasingly focused on serial acquisition theories, especially where individual transactions fall below HSR thresholds but collectively may reduce competition. For sponsors and strategic buyers, antitrust diligence should therefore cover not only the pending acquisition but also prior acquisitions, pipeline targets, market share accumulation, and the investment thesis.
The fifth diligence question is whether any minority investment, governance right, or board right creates competitive sensitivity. HSR analysis often focuses on acquisitions of voting securities, assets, or non-corporate interests, but antitrust issues can also arise from influence, information access, or interlocking governance relationships. A minority investor with board representation, veto rights, observer rights, access to competitively sensitive information, or influence over pricing, output, expansion, hiring, or strategic decisions may raise concerns even where the investment does not confer control in the ordinary corporate-law sense. The practical risk is greatest when the investor also holds interests in a competitor or platform company operating in the same space.
The sixth diligence question is whether the parties are exchanging competitively sensitive information before closing. Even in a non-reportable deal, parties remain separate competitors until closing. They should not coordinate pricing, customers, bids, wages, capacity, marketing strategy, or other competitive conduct. Integration planning is permitted, but it must be structured carefully. Clean teams, outside advisors, aggregated data, and need-to-know protocols are often necessary where the parties compete. The absence of an HSR filing does not eliminate gun-jumping, information-sharing, or pre-closing coordination risks.
The seventh diligence question is whether the purchase agreement reflects the actual antitrust risk. In many middle-market agreements, antitrust provisions are drafted as if HSR is the only relevant regulatory issue. That can be too narrow. If a transaction presents meaningful competitive issues below the filing threshold, the agreement should address cooperation with regulators, responses to inquiries, timing extensions, defense strategy, divestiture obligations, operating covenants, information controls, and termination rights. The parties should also decide whether a regulatory inquiry from a state attorney general, federal agency, or foreign authority triggers a closing condition or covenant obligation even if no HSR filing is required.
The eighth diligence question is whether the valuation and deal structure have been analyzed correctly. HSR valuation can be technical, particularly where the consideration includes cash, rollover equity, earnouts, assumed liabilities, debt payoff, contingent payments, non-compete payments, or separate but related agreements. A deal described commercially as a $120 million acquisition may have an HSR value above the threshold depending on how consideration and liabilities are treated. Conversely, a transaction that appears above the line may fall below after proper valuation and exemption analysis. Because valuation mistakes can lead to failure-to-file exposure, the HSR analysis should be performed with deal documents, capitalization materials, and payment mechanics in hand.
The ninth diligence question is whether an exemption applies. HSR contains exemptions for certain transactions, but exemptions are fact-specific and should not be assumed. Asset acquisitions in the ordinary course, acquisitions of real property, passive investment exemptions, intraperson transactions, certain foreign asset or voting securities acquisitions, and investment-only acquisitions can all be relevant, but each has limits. In the middle market, exemption analysis often becomes complicated when a transaction involves mixed assets, operating businesses, intellectual property, licensing rights, minority governance rights, or foreign subsidiaries with U.S. sales. A correct exemption can save time and money; an incorrect exemption can create avoidable enforcement exposure.
The tenth diligence question is whether the target’s ordinary-course documents contain antitrust themes that have not surfaced in management interviews. Deal teams often rely on management’s verbal view that the company has many competitors or that customers have many alternatives. Documents may tell a different story. Sales decks may identify only two serious rivals. Pricing analyses may show that the target wins because it is the only regional provider with certain capabilities. Board materials may celebrate high switching costs. Customer presentations may describe a product as mission-critical. Those facts do not necessarily make a deal unlawful, but they should be understood before signing and certainly before closing.
The HSR form vacatur may tempt some parties to reduce antitrust diligence because the currently accepted form is less demanding than the expanded form. That would be a mistake. The expanded form’s fall does not erase the agencies’ substantive concerns. It only changes what must be provided at the initial filing stage. If regulators identify a concern, they can still ask questions, request documents, contact customers, issue a Second Request in a reportable deal, investigate a non-reportable deal, or challenge a transaction after closing. The better lesson from the expanded-form period is that parties should know their own competitive story before the government asks for it.
For sellers, the issue is not only regulatory delay. Antitrust diligence can affect certainty of closing, purchase price, indemnity exposure, and post-signing leverage. A seller that understands potential overlaps, market shares, customer concentration, and buyer acquisition history can negotiate more intelligently over regulatory efforts covenants, reverse termination fees, outside dates, and information-sharing protocols. A seller that ignores those issues may discover too late that the buyer’s broader platform strategy, not the target’s standalone business, is the source of risk.
For buyers, the issue is not only whether the deal can close. Antitrust risk can affect integration planning, synergy assumptions, financing timelines, lender communications, and post-closing conduct. A buyer should know whether expected synergies depend on customer consolidation, pricing changes, facility closures, supplier renegotiation, or workforce reductions in a concentrated labor market. Some efficiencies may support the transaction, but they must be documented carefully and separated from statements suggesting market power. A buyer that waits until an inquiry arrives to develop its efficiencies narrative may find that the contemporaneous documents already tell a less favorable story.
For lenders and investors, the antitrust review is also part of credit and execution risk. A delayed closing can affect commitment periods, financing fees, leverage metrics, and market-flex provisions. A post-closing investigation can affect integration costs, management distraction, divestiture risk, and exit timing. In sponsor-backed middle-market deals, lenders should be alert to platform acquisition strategies in concentrated sectors, especially where the borrower’s growth model depends on rapid add-on acquisitions that individually fall below the HSR threshold. The absence of an HSR filing in the immediate transaction does not necessarily mean the regulatory risk is immaterial to the investment thesis.
The most practical response is to build a right-sized antitrust diligence process for every transaction near the filing line or in a competitively sensitive sector. That process does not need to turn every middle-market acquisition into a full-scale merger investigation. It should, however, require early issue spotting. Counsel should confirm current thresholds, perform valuation analysis, identify exemptions, map overlaps and vertical relationships, review key transaction rationale documents, assess prior acquisitions, evaluate information-sharing protocols, and draft purchase agreement provisions that match the risk. The depth of review should increase as competitive proximity, market concentration, customer concern, or serial acquisition facts increase.
The same approach applies to transactions that are comfortably below the threshold but strategically significant. A $40 million acquisition can matter in a rural health care market, a specialized manufacturing niche, a defense supply chain, a local waste hauling market, a veterinary services roll-up, a software module with network effects, or a labor market for scarce technical employees. Antitrust law is concerned with competitive effects, not merely transaction value. For that reason, middle-market deal teams should resist the instinct to equate “small” with “safe.”
The current HSR environment also rewards careful communications. Businesspeople should not be told to avoid discussing competition; they should be told to describe the transaction accurately. Overheated language about “dominating,” “locking up,” “neutralizing,” “taking out,” or “controlling” a market can create unnecessary risk when the same business point could be stated truthfully in terms of capacity, service quality, investment, product expansion, customer demand, or operational efficiency. Antitrust-sensitive drafting is not about sanitizing documents after the fact. It is about ensuring that ordinary-course documents reflect the legitimate rationale for the deal.
Looking ahead, the form issue may continue to evolve. The expanded form was vacated, but the agencies’ desire for more useful premerger information remains. The FTC’s current guidance confirms that the prior form is again being accepted, while also allowing parties to submit under the expanded form voluntarily.⁵ That posture should be treated as temporary in a practical sense, even if it remains in place for some time. Deal teams should expect future rulemaking, revised instructions, agency guidance, or renewed efforts to obtain more information about transaction rationale, overlaps, supply relationships, ownership, prior acquisitions, and non-traditional deal structures.
The best middle-market practice is therefore neither panic nor complacency. Parties should not assume that every deal requires expensive antitrust work simply because the HSR environment has been unsettled. They also should not assume that a reverted form and a higher threshold eliminate risk. The sensible middle ground is disciplined early diligence. Confirm the filing analysis. Understand the competitive story. Control sensitive information. Draft the agreement to fit the risk. Preserve credible efficiencies. Identify customer, supplier, labor, and roll-up issues before they become surprises. Above all, remember that HSR is a filing regime, not a substantive immunity rule.
HSR whiplash has made the filing process feel unstable, but it has also clarified an important point. Middle-market M&A cannot treat antitrust as an afterthought reserved for billion-dollar deals. The 2026 thresholds may remove some transactions from mandatory pre-closing notification, and the vacatur of the expanded form may reduce the immediate burden for reportable deals. But antitrust diligence below the filing line remains essential where the facts suggest competitive significance. In the current environment, the most sophisticated deal teams will be those that understand both sides of the line: when HSR requires a filing, and when antitrust risk requires attention even without one.
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Footnotes:
1- Federal Trade Commission, “New HSR thresholds and filing fees for 2026,” Competition Matters Blog, January 20, 2026. https://www.ftc.gov/enforcement/competition-matters/2026/01/new-hsr-thresholds-filing-fees-2026
2- Federal Trade Commission, “Revised Jurisdictional Thresholds for Section 7A of the Clayton Act,” 91 Federal Register 2133, January 16, 2026. https://www.ftc.gov/legal-library/browse/federal-register-notices/revised-jurisdictional-thresholds-section-7a-clayton-act-13
3- Federal Trade Commission, “Premerger Notification; Reporting and Waiting Period Requirements,” 89 Federal Register 89216, November 12, 2024. https://www.federalregister.gov/documents/2024/11/12/2024-25024/premerger-notification-reporting-and-waiting-period-requirements
4- Chamber of Commerce of the United States of America, et al. v. Federal Trade Commission, et al., Memorandum Opinion and Order, Case No. 6:25-cv-00009-JDK, United States District Court for the Eastern District of Texas, February 12, 2026. https://www.uschamber.com/assets/documents/Opinion-Chamber-of-Commerce-v.-FTC-E.D.-Tex.pdf
5- Federal Trade Commission, “HSR Notification Forms, Instructions and Guidance,” updated March 23, 2026. https://www.ftc.gov/enforcement/premerger-notification-program/hsr-notification-forms-instructions-guidance