Federal Court Strikes Down FTC’s Expanded M&A Reporting Requirements

In 2024, the Federal Trade Commission finalized a new rule that expanded dramatically the scope of information required by the Hart-Scott-Rodino Act Premerger Notification Form.[1] Under the 2024 HSR Rule, merging parties were required for the first time to explain the “strategic rationale” for the proposed transaction, submit recent plans and reports discussing competition that were shared with the Board of Directors or CEO, and provide additional information on their current and anticipated business activities.[2] As Sullivan & Cromwell explained at the time, the 2024 requirements were expected to “significantly increase the time, burden, and expense associated with all transactions reportable under the HSR Act.”[3]

On February 12, 2026, a federal court in the Eastern District of Texas struck down the 2024 HSR Rule.[4] The Court found that the FTC exceeded its statutory authority by adopting additional requirements without showing they were “necessary and appropriate” to help the FTC identify transactions that required additional scrutiny.[5] The Court reasoned that the agency had “fail[ed] to substantiate” its assertions that the Rule’s new requirements would “detect illegal mergers and save agency resources,” and noted that the FTC “could not identify a single illegal merger in the forty-six year history of the prior Form that the Final Rule’s new form would have prevented.”[6] The Court also concluded that the 2024 HSR Rule was arbitrary and capricious under the Administrative Procedure Act because the FTC had failed to show that the Rule’s benefits outweigh its costs and had not explained its basis for rejecting less burdensome alternatives, such as voluntary submissions by merging parties or more targeted information requests for specific transactions.[7] After concluding that the 2024 HSR Rule was unlawful, the Court determined that the appropriate remedy was to vacate the Rule nationwide.[8]

The district court has stayed its decision for seven days “to allow the FTC time to seek emergency relief” from the U.S. Court of Appeals for the Fifth Circuit.[9] The Premerger Notification Office has advised that “the new form thus remains in place through February 19.”[10] Absent a stay from the district court or Fifth Circuit, the prior HSR form will be operative for merging parties starting after that date. Sullivan & Cromwell, which also represents the plaintiffs in this case, will continue to alert clients of any developments affecting HSR filings.