2026 Annual Updates to the United States Pre-Merger Notification (HSR Act) and Interlocking Directorates Thresholds

Overview

The Federal Trade Commission (“FTC”) has revised the thresholds that govern pre-merger notification requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), and Section 8 of the Clayton Act governing “interlocking directorates.” The new HSR thresholds, including the minimum size-of-transaction threshold of $133.9 million, will become effective for all transactions closing on or after February 17, 2026.

HSR Act Thresholds and Fees Have Increased

The HSR Act requires parties to transactions that meet the statutory thresholds to file notification with the FTC and the Department of Justice’s Antitrust Division (“DOJ”) and abide by a waiting period before completing the transaction. The statutory thresholds are revised each year based on a formula related to the size of the U.S. economy and to inflation. In January, the FTC announced the revised thresholds, which will be effective for all transactions closing on or after February 17, 2026. The revised minimum size-of-transaction threshold changes from $126.4 million to $133.9 million, an increase of $7.5 million. (For the prior thresholds, see our previous alert). The FTC also announced modest increases to the HSR filing fees, roughly indexed to inflation.

An important distinction between the thresholds and the filing fees is that the size-of-transaction thresholds are those in effect at the time of closing, while the filing fees are those in effect at the time of filing. Companies negotiating transactions in Q1 of 2026 (and in future years’ Q1s, as well) should be mindful of how the annual threshold and fee updates might affect their deal’s reportability or filing fee expenses.

The HSR Act applies to acquisitions of voting securities, non-corporate interests (to the extent those interests constitute 50% or more of the rights to profits or assets upon dissolution of a company), and assets. Under the 2026 revised thresholds, there are three general steps to determine whether parties must submit an HSR Act notification and observe a waiting period (“file HSR”):

• Parties to a transaction with a value of $133.9 million or less do not file HSR.¹
• Parties to a transaction valued in excess of $133.9 million, and up to $535.5 million, must file HSR only if they also meet the “size of persons” test: generally, one party to the transaction has annual net sales or assets of at least $267.8 million, and the other party to the transaction has annual net sales or assets of at least $26.8 million.
• Parties to a transaction valued in excess of $535.5 million must file HSR (if not otherwise exempt), regardless of the parties’ sizes. The “size of persons” test is not used for these larger deals.

In addition to the jurisdictional thresholds above, when an acquiring person has made or will make multiple acquisitions of voting securities in a corporation, acquiring persons must file when they cross certain notification thresholds, unless they have previously filed HSR to cross the relevant threshold and the waiting period expired within the past five years. Those thresholds are set out below:

• The acquiring person will hold aggregate voting securities valued at more than $133.9 million, but less than $267.8 million;
• The acquiring person will hold aggregate voting securities valued at $267.8 million or more, but less than $1.339 billion;
• The acquiring period will hold aggregate voting securities valued at $1.339 billion or more;
• The acquiring person will hold aggregate voting securities that constitute 25% or more of the company’s outstanding voting securities, if those securities are valued at $2.678 billion or more;
• The acquiring person will hold aggregate voting securities that constitute 50% or more of the company’s outstanding voting securities, if those securities are valued at greater than $133.9 million.

There is also a requirement that the transaction impact United States commerce.

HSR Act exemptions (except where tied to the “as adjusted” thresholds) and waiting periods remain unchanged. Many filing exemptions apply. For example, asset acquisitions of certain types of real property are not subject to HSR filing, and acquisitions of oil, gas, shale, and tar sand reserves and associated exploration and production assets are exempt if their value to be held as a result of the acquisition does not exceed $500 million.² The typical waiting period is 30 days (unless extended), which may be shortened in the case of bankruptcy, tender offers, or discretionary “early termination.”

In table format, the jurisdictional thresholds, valuation tiers, and fees are the following:

Clayton Act Section 8 Thresholds

Section 8 of the Clayton Act, 15 U.S.C. § 19, states that “no person shall, at the same time, serve as a director or officer in any two corporations (other than banks, banking associations, and trust companies) that are [competitors],” if the two corporations are each above a size threshold and they cannot show that their competitive sales are below certain de minimis sales thresholds (explained below). Technically, Section 8 applies only to corporations, but both DOJ and the FTC take the position that they can use their broader antitrust authority to enforce the same concept against non-corporate entities as well.³

Interlocking directorates that violate Section 8 are per se illegal, meaning that antitrust authorities do not need to establish anticompetitive effects for liability to attach. As such, a company cannot escape liability by putting up firewalls or otherwise arguing a lack of effects. Importantly, and particularly relevant for private equity investors, the agencies read the requirement for an interlocking “person” in the statute to mean a “representative,” not an individual person — they take the position that an interlock involving the same individual named person is not required for Section 8 liability to arise. In the agencies’ view, an interlock can exist if different persons serve on the different boards or officer slates, but those different persons are answerable to the same corporation (e.g., both are employees of the same company).

The corporate size threshold for Section 8 is triggered when each of two competing corporations that share a director or officer have “capital, surplus, and undivided profits” of more than $54,402,000 (for 2026, annually adjusted). Even if the corporations in question meet the size threshold, however, the statute allows for certain exceptions in cases where they compete in only a minimal way. These de minimis competitive sales thresholds essentially act as affirmative defenses against what might otherwise be a Section 8 violation. The de minimis sales tests are:

• The competitive sales⁴ of either corporation are less than $5,440,200 (for 2026; annually adjusted);
• The competitive sales of either corporation are less than 2 percent of that corporation’s total sales;⁵ or
• The competitive sales of each corporation are less than 4 percent of that corporation’s total sales.

Even if a company determines that the de minimis competition defense applies to its situation, it is a good idea to keep a paper trail showing that the common director or officer cannot act as a conduit to facilitate price fixing, bid rigging, or customer or geographical allocation, done in secret or by means of fraud on the customer. These types of antitrust violations — described by the U.S. Supreme Court as the “supreme evil” of antitrust⁶ — are not subject to de minimis defenses and can lead to significant and potentially criminal liability. Accordingly, it is a best practice for a common director or officer to recuse himself or herself from any matter in which the companies in question are bidding against, or otherwise directly competing with, each other, head-to-head.

While Section 8’s liability standard is strict, it does not carry an automatic monetary penalty. The usual result of Section 8 liability is merely an order to cease one of the overlapping director or officer positions. That said, investigations can be expensive, and there is always a possibility that a Section 8 violation could determine that an interlock caused an actual reduction of competition for which damages could be imposed under other antitrust statutes, or could expose other wrongdoing that the government would not ignore.

Fortunately, Section 8 provides for a one-year grace period for interlocks that were not problematic when they began, but later became so when the companies started to compete (or competed more than at a de minimis level, as explained above) after the interlock already existed. Companies that find themselves in this “thrust-upon” infringement of Section 8 have 12 months, measured from when the violation begins, to end the interlock.