The new HSR rule and what it costs middle market sellers
The FTC's overhaul of the Hart Scott Rodino premerger notification rule took effect on February 10, 2025. The practical cost is borne by sellers more than buyers.
The Federal Trade Commission published its overhaul of the Hart Scott Rodino premerger notification rules in November 2024 and the new form took effect on February 10, 2025. The final rule appears at 89 Fed. Reg. 89216. The first six months under the new regime have given the corporate bar enough data to say something honest about what the rule changed in practice.
The headline change is the volume of information now required at the notification stage. The new form requires deal rationale documents, transaction-related business plans, organizational charts identifying officers and directors, and a list of supply relationships with the parties' top customers. The old form, in comparison, was a fill-in exercise.
Where the burden actually lands
In a strategic deal between two operating businesses, the burden is shared. In a private equity acquisition, the burden falls overwhelmingly on the seller. The reason is mechanical. The buyer is a fund that does not have a business plan for the target. The seller has the customer list, the organizational chart, the management deck, and the integration analysis. The seller produces the bulk of the new form's substantive content.
That has compressed deal timelines and added cost on the sell side. A middle-market seller that used to clear HSR with a couple of weeks of associate time now needs document collection, legal categorization, and a final review pass that runs longer. The cost is real money on a fifty million dollar deal and it is meaningful on a hundred million dollar one.
A middle-market seller that used to clear HSR with a couple of weeks of associate time now needs a document collection process that resembles second request prep on a much larger deal.
Where AI document review fits
The new form is what AI document review tools were built for. Categorizing twenty thousand documents into deal rationale, business plan, ordinary course, and not-relevant buckets is repetitive work with a clear taxonomy. Tools like Kira (now part of Litera), Harvey, Hebbia, and Spellbook handle the first pass cleanly. The human review then concentrates on the close calls and the documents that the model flagged with low confidence.
This is the kind of work that genuinely gets better with AI tooling and where the cost savings show up immediately. A senior associate's review hours move from "read everything" to "read what the tool flagged." The economic shift is real for the firm and for the client.
What sellers should do at signing
The cleanest move for a seller is to start the document collection process at LOI, not at signing. Building a centralized matter folder with deal rationale documents, board materials, integration analyses, and management presentations from the beginning means the HSR production is a categorization exercise rather than a hunt.
The second move is to scope diligence requests with the new form in mind. If the buyer asks for a deal rationale memo during diligence, the seller's counsel should anticipate that the same document will likely need to be produced to the agency. Drafting it with two audiences in mind from the start saves a redraft cycle later.
What buyers should do
Buyer side counsel should still drive the HSR strategy, but the new rule has shifted the work allocation. Build the production schedule with seller counsel early. Establish a privileged review protocol up front. And be specific in diligence requests so that the seller's HSR collection is a superset of what the deal team already has.
The new rule did not change the substance of antitrust review. It changed how much of the work happens before the agency sees the deal. For sellers, that means more cost and more time. For buyers, that means a more involved process partner. For the corporate bar, that means the document categorization problem just got bigger, and the tools that solve it just got more useful.
Walter Allison is a corporate attorney in Denver. He writes here about M&A, private equity, and venture capital structure.
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