The Antitrust Attorney Blog
Authors: Steve Cernak, Luis Blanquez and Kristen Harris
Two companies in Germany agree to a deal. One buys the other. Both are incorporated in Germany, run from Germany, selling mostly to European customers. No one in the boardroom is thinking about Washington. Then someone asks the question that stops the meeting: before we can close, do we have to file with the U.S. antitrust agencies?
The answer is usually no. But “usually” is not “always,” and getting it wrong is expensive. A missed Hart Scott Rodino filing carries civil penalties that now exceed $50,000 per day, and the agencies have collected them from foreign parties who assumed a foreign deal was none of their concern.
Why a deal between two foreign companies reaches U.S. law at all
The Hart Scott Rodino Antitrust Improvements Act requires parties to notify the Federal Trade Commission and the Department of Justice before closing certain mergers and acquisitions, then wait out a review period. Nothing in the statute says the buyer or the seller must be American. What matters is whether the deal is large enough and connected enough to U.S. commerce to warrant a look.
A few points decide that.
- The first is the transaction size. For 2026, HSR reaches a transaction only if it is valued above $133.9 million. That figure adjusts every year, and the current version took effect February 17, 2026. If your deal sits below it, you stop here. There is no filing, and the rest of this article is background reading.
- Party size matters too. For a deal valued between $133.9 million and $535.5 million, there is no filing unless one side also has at least $267.8 million and the other at least $26.8 million in total assets or annual net sales. Above $535.5 million, party size stops mattering and the deal is reportable unless an exemption applies.
- The second point is where foreign parties get comfortable too quickly. Once a deal clears the size threshold, the default assumption is that it must be reported. But for deals with little real U.S. footprint, the FTC built a set of exemptions precisely so that a Germany to Germany transaction with modest U.S. activity does not clog the U.S. review system. Those are the foreign-to-foreign exemptions, and they live in the FTC’s rules at 16 C.F.R. 802.50, 802.51, and 802.52.
The two measurements that decide everything
The first is sales in or into the United States. This is broader than it sounds. It captures not only what the target sells from U.S. operations but also what it exports into the United States from abroad. A German manufacturer with no U.S. office but real American customers has U.S. sales for this purpose.
The second is assets located in the United States: plants, inventory, equipment, and similar property physically in the country.
So, almost every foreign-to-foreign question comes down to measuring the target’s U.S. sales and U.S. assets in the country.
The exemptions, in plain terms
Stock deals: acquiring voting securities of a foreign issuer (802.51)
When the target is a foreign company and the buyer acquires its shares, the analysis depends on who is buying.
If the buyer is a U.S. person, the deal is exempt unless the foreign target holds U.S. assets worth more than $133.9 million or made sales in or into the United States above $133.9 million in its most recent fiscal year.
If the buyer is also foreign, as in our German example, the test is harder to trip. The deal is exempt unless two things are both true: the acquisition gives the buyer control of the target, and the target holds U.S. assets above $133.9 million or made U.S. sales above $133.9 million. A foreign buyer taking a non-controlling stake in a foreign target is generally outside HSR regardless of the target’s U.S. numbers.
Asset deals: acquiring foreign assets (802.50)
When the deal is a purchase of assets located outside the United States, it is exempt unless those foreign assets generated more than $133.9 million in sales in or into the United States during the seller’s most recent fiscal year. If the assets you are buying threw off less than that in U.S. sales, the acquisition is exempt.
Even when a deal crosses the $133.9 million line above, one more exemption can still apply when both the buyer and the seller are foreign. The transaction stays exempt if the two sides’ combined U.S. sales are below $294.5 million, their combined U.S. assets are below $294.5 million, and the deal is valued at $535.5 million or less. This is the provision that saves many mid-sized foreign to foreign deals that have some U.S. business.
Whether a company is a foreign person turns on its ultimate parent, not on where it operates.
A German company controlled by a US parent is a U.S. person for HSR. If either side of a German-to-German deal sits under a U.S. parent, you analyze the deal as one involving a U.S. person under the test above.
Deals involving a foreign government (802.52)
A separate exemption covers acquisitions in which a foreign state, or an entity it controls, is a party and the assets or securities are of that foreign state. If a sovereign is on one side of your deal, this is the rule to check.
So, how do I analyze my deal to determine whether an HSR filing is necessary?
Run the deal through six questions, in order.
- Is the transaction valued above $133.9 million? If not, there is no HSR filing, full stop.
- Are the parties large enough? For a deal between $133.9 million and $535.5 million, there is no filing unless one party has $267.8 million and the other $26.8 million in assets or annual sales. Below that, two smaller companies can stop here. (Above $535.5 million, party size no longer matters.)
- Is this a stock deal or an asset deal? Stock takes you to 802.51; assets take you to 802.50.
- Measure the target’s U.S. sales and U.S. assets for its most recent fiscal year. If each is at or below $133.9 million, the deal is exempt. For a foreign buyer taking a non-controlling stake, it is exempt regardless.
- If the target is above that line, are both parties foreign, are combined U.S. sales and combined U.S. assets each below $294.5 million, and is the deal $535.5 million or less? If yes, still exempt.
- If none of these apply, you most likely have to file. For most European deals, the analysis ends at question one, two, or four.
But an exemption from HSR is not a clean bill of health. HSR is a filing rule and just decides whether you must notify the agencies and wait, not whether the deal is lawful. A transaction that is exempt from filing can still be investigated and challenged under Section 7 of the Clayton Act. The FTC and DOJ have opened investigations into non reportable deals, and private plaintiffs can sue. No filing does not mean no scrutiny.
And the United States is just one jurisdiction among many. The same deal that skips HSR may still require merger clearance in the European Union, in Germany, or elsewhere. Clearing the U.S. question tells you nothing about those obligations, and the European thresholds work very differently.
Bottom line: pull the target’s most recent fiscal year figures for U.S. sales and U.S. assets before you value the deal, not after you sign. Remember that “in or into” the United States sweeps in export sales, so a target with no U.S. address can still have U.S. sales. And bring in U.S. antitrust counsel to run the exemption analysis while the deal is still being negotiated, when documenting a clean exemption costs almost nothing.
Image by Gerd Altmann from Pixabay