How a merger gets regulatory approval: HSR, second requests and CFIUS

The merger agreement lists the approvals the deal needs among its closing conditions. The deal can't close until each is in, or waived where the agreement and the law allow. The usual ones:

US antitrust

An HSR filing with the FTC and the Justice Department, then a waiting period, for deals above a size threshold.

Antitrust abroad

Reviews where the companies do business, such as by the European Commission, the UK's CMA or China's SAMR.

National security

A CFIUS review of a foreign buyer's investment in a US business.

Industry regulators

Agencies that oversee banks, utilities, insurers or telecoms, among others, may also have to approve.

Each review runs on its own clock, often at the same time as the others. The deal can close only once the last required approval is in.

Under the Hart-Scott-Rodino Act, the parties to a large deal must notify the FTC and the Justice Department. Then they must wait before closing. Only one of the two agencies investigates a given deal.

A review can pass through these stages, and many deals skip the second request:

Filing

The parties file the HSR form, and the buyer pays the filing fee. The waiting period usually starts once both have filed.

Waiting period

The parties typically must wait 30 days after filing before closing, or 15 days for a cash tender offer. The agencies may end it early.

Second request

Before the wait ends, the agency may ask for more documents and data: a second request. The parties then can't close until 30 days after both have substantially complied.

Wait over

Once the wait ends without action, the HSR requirement is met. Other conditions may remain, and the agencies can still challenge the deal later.

Challenged

The agency may sue to block the deal, or settle for changes such as divestitures. The parties may also give the deal up.

In a cash tender offer, a second request extends the wait until 10 days after the buyer has substantially complied.

Since February 17, 2026, the HSR threshold is $133.9 million. A deal usually needs a filing if the buyer would hold more than that of the target's voting securities or assets. Exemptions apply.

Up to $535.5 million, the filing applies only if both sides are also large enough. Usually one side's group must have $267.8 million or more in sales or assets, and the other $26.8 million or more. Some sellers are measured by assets only.

Above $535.5 million, the companies' size doesn't matter.

The filing fee depends on the size of the deal:

Under $189.6 million

$35,000

$189.6 million to under $586.9 million

$110,000

$586.9 million to under $1.174 billion

$275,000

$1.174 billion to under $2.347 billion

$440,000

$2.347 billion to under $5.869 billion

$875,000

$5.869 billion or more

$2,460,000

The thresholds change each year with the size of the US economy, and the fees with consumer prices. The new figures usually take effect in February.

Few deals get a second request. In the year to September 30, 2025, 2,006 deals were filed under HSR.

Of the 1,944 for which the agencies could issue one, 41 got a second request: 2.1%. The FTC issued 20 and the Justice Department 21.

Larger deals got them more often: 21.1% of the deals valued over $10 billion.

A second request usually adds months. For the 16 significant US merger investigations concluded in 2025, the average from announcement to conclusion was 12.3 months.

Early termination ends the wait before its 30 days are up. The agencies suspended it on February 4, 2021.

For filings in the year to September 2025, they granted it in 265 of the 911 deals that asked, against 3 the year before.

The European Commission reviews deals above its turnover thresholds. One test is a combined worldwide turnover over €5 billion, with at least two of the companies each over €250 million in the EU. It doesn't apply if each company earns over two-thirds of its EU turnover in the same member state.

A second, lower set of thresholds also applies.

A deal under its review usually can't close until the Commission clears it, with limited exceptions.

After notification, the Commission has 25 working days for a phase 1 review. If it opens a phase 2 investigation, it has 90 working days to decide. Extensions of 15 or 20 working days can be added.

The UK's CMA and China's SAMR also review deals in phases, each on its own timetable.

CFIUS reviews foreign investment in US businesses for national security. For some deals, a filing is mandatory.

A short filing, a declaration, may get a 30-day assessment. Once CFIUS accepts a full notice, it has a 45-day review, then a 45-day investigation as needed.

In extraordinary circumstances, the investigation can be extended by 15 days. CFIUS may also refer a deal to the President, who decides within 15 days.

Approvals usually set when a deal can close. A second request or an in-depth review abroad often adds months.

With a fixed offer and no other payments, the dollar gain stays the same. But the annualized spread falls as the date moves out.

Many agreements let the outside date move later while approvals are pending.

The agreement also sets how far the buyer must go to win approval: its divestiture commitment and any duty to litigate.

If a regulator blocks the deal, the agreement may make the buyer pay the target a reverse termination fee. Holders don't receive the fee, and the shares keep trading without the offer behind them.