Does a middle-market transaction ever get reviewed?
Rarely, and when it does the trigger is usually the market rather than the price. A transaction well below the sizes that generate headlines can attract scrutiny if both parties are among a handful of competitors in a narrow product or geographic market, if the sector is one the agencies are already examining, or if a state-level notification regime applies.
The federal volume gives a sense of the base rate. There were 2,006 notified transactions in the 2025 fiscal year against 2,031 the year before, with a second request rate of 2.1 percent (FTC and DOJ, 48th Annual Hart-Scott-Rodino Report, released 2 July 2026, covering the 2025 fiscal year). A second request is the point at which a filing becomes an investigation, and it happens to roughly one notified transaction in fifty.
The reporting thresholds and filing fees that determine which transactions must be notified are re-set by regulation and republished, so no figure for them is quoted here. A transaction near any of those thresholds should have the current numbers confirmed by counsel rather than taken from an article.
There is also a state layer that has grown quickly and that sellers frequently miss. Sixteen states have enacted sector-specific pre-merger notification statutes, principally in healthcare, with filing windows running from 30 to 180 days before closing (Herbert Smith Freehills Kramer, via Lexology, 9 January 2026). A 180-day state window can be the longest single item on a timetable that has no federal issue at all.
What has changed in how the agencies behave?
They stopped blocking and started conditioning. The 2025 fiscal year produced five consent decrees out of eighteen enforcement actions, against zero out of thirty-two the year before (FTC and DOJ, 48th Annual HSR Report, released 2 July 2026). Under a litigation-first posture a transaction either survived or died. Under a remedy posture, the agencies negotiate a divestiture and the transaction clears.
Clearance velocity improved at the same time. Early termination of the waiting period was granted 381 times during 2025, against effectively none in the preceding administration, including 122 times in December 2025 alone (Rule Garza Howley, Antitrust M&A Outlook, 4 February 2026).
One recent order shows what a conditioned clearance looks like at modest size. A generic pharmaceutical acquisition of around 250 million dollars cleared in June 2026 only after the divestiture of four product lines to a third party, with transition services mandated from both parties so the divested assets were operable immediately. The review ran close to twelve months on a transaction well below half a billion dollars, in four thinly traded product markets (FTC consent order, June 2026, parties not named here).
For most middle-market participants the remedy posture is an opportunity rather than a risk. Forced divestitures produce assets that must be sold on the remedy timetable rather than at the seller's convenience, and those assets are frequently middle-market sized.
“The regulatory question almost never kills a deal at this size. It kills a timetable, and a timetable is what a seller is actually selling when there are two bidders. Finding out in month five that one of them needs a state healthcare filing with a hundred and eighty day window is not a legal problem. It is a negotiating position handed to the other side.”
How long does a review actually take?
About ten months once it becomes an investigation, and that is an improvement. Significant US merger investigations concluded in the first quarter of 2026 averaged 10.8 months, down from a record 12.3 month average across full-year 2025, with deals announced in 2025 and reviewed entirely under the current agencies averaging 10.2 months (Dechert DAMITT Q1 2026 report, published 29 April 2026).
Set that against the statutory design. The federal waiting period runs thirty days for most transactions, and the gap between thirty days and ten months is the whole practical problem. A process that assumed a routine clearance and papered a short outside date will run out of time long before the agency finishes.
The delay compounds with a diligence process that is already lengthening. Seventy-three percent of senior US investment bank executives expect diligence to become more complex over the next twelve to twenty-four months, and 57 percent of firms already seeing extension report one to three additional months (SRS Acquiom and Mergermarket, published 23 February 2026, surveying 150 senior US investment bank executives).
No dataset measures how often middle-market transactions break because of regulatory review, so the frequency cannot be quantified here. What can be said is that the cost is borne in months, in employee and customer uncertainty, and in the seller's loss of leverage as alternatives fall away.
What does a foreign acquirer add?
A second review track, on a different timetable, with different criteria. Foreign investment screening in the United States turns on what the target does rather than on what it is worth: technology, critical infrastructure, sensitive personal data, and proximity to certain government facilities are the categories that matter, and some acquisitions in those categories carry a mandatory filing. The criteria are set by regulation and are not summarised numerically here, because they change and because getting them approximately right is worse than getting them from counsel.
The practical points for a seller are three. Screening applies to control acquisitions and to some non-controlling investments with information or governance rights. It applies regardless of transaction size in the mandatory categories. And it is not confined to the United States, so a cross-border buyer may need clearances in its own jurisdiction as well.
Foreign ownership reviews have produced conditioned outcomes rather than prohibitions in a number of recent matters, but the conditions can be substantive and the timetable is not within either party's control. A bidder who has cleared such a review before, and can describe how long it took, is a materially different counterparty from one who has not.
None of this argues against foreign bidders. Cross-border interest is often where the strongest price comes from. It argues for treating the review as a diligence item on the buyer, run at the same time as the buyer's diligence on the business.
How is review risk allocated in the agreement?
Through four terms that are negotiated together and are usually settled before anyone knows whether a review will happen. The efforts standard, the outside date, the allocation of remedy risk, and any fee payable if the transaction fails for regulatory reasons.
The efforts standard determines how hard the buyer must work to obtain clearance, and whether it must accept a divestiture to get one. A buyer who will commit to divest whatever is required is offering a different level of certainty from one who has agreed only to use reasonable efforts, and the difference is worth real money to a seller in a market where certainty is scarce.
The outside date has to be set against the ten-month reality rather than against the thirty-day statutory period, with automatic extensions if a second request or a state filing arrives. An outside date that expires mid-investigation gives the buyer an exit precisely when the seller has least alternative.
The fourth term is the one sellers most often forget to ask for. A fee payable if the transaction fails on regulatory grounds converts an uncontrollable risk into a priced one. It is unusual at middle-market size and it is not unavailable, particularly where the seller has an alternative bidder and the regulatory issue belongs to the buyer rather than to the business.
| Term | What it decides | Seller-favourable form |
|---|---|---|
| Efforts standard | How hard the buyer must work for clearance, and whether it must accept a remedy | A commitment to take the actions required to obtain clearance, including divestiture, rather than reasonable efforts alone |
| Outside date | When either party may walk away | Set against a ten-month investigation reality, with automatic extension on a second request or a state filing |
| Remedy risk allocation | Who bears the cost if a divestiture or condition is required | The buyer, with no price adjustment for remedies imposed on its own portfolio |
| Regulatory failure fee | What the seller receives if the transaction fails for review reasons | A fee payable on regulatory termination, sized against the months of exclusivity given up |
As of August 2026
Sources: Dechert, DAMITT Q1 2026 report, published 29 April 2026, for average significant US merger investigation duration of 10.8 months concluded in the first quarter of 2026, the record 12.3 month full-year 2025 average, and the 10.2 month average for deals announced in 2025 and reviewed entirely under the current agencies; Federal Trade Commission and Department of Justice, 48th Annual Hart-Scott-Rodino Report, released 2 July 2026, covering the 2025 fiscal year, for 2,006 notified transactions against 2,031 the prior year, a second request rate of 2.1 percent, and five consent decrees out of eighteen enforcement actions against zero out of thirty-two the year before; Rule Garza Howley, Antitrust M&A Outlook, 4 February 2026, for early termination granted 381 times during 2025 and 122 times in December 2025; Herbert Smith Freehills Kramer, via Lexology, 9 January 2026, for sixteen states having enacted sector-specific pre-merger notification statutes and filing windows of 30 to 180 days before closing; Federal Trade Commission consent order, June 2026, for the conditioned clearance of a generic pharmaceutical acquisition of around 250 million dollars requiring divestiture of four product lines with mandated transition services, described here without naming the parties; SRS Acquiom and Mergermarket, published 23 February 2026, surveying 150 senior US investment bank executives, for diligence complexity expectations and added months. Reporting thresholds, filing fees and foreign investment screening criteria are set by regulation and are not quoted. Agreement terms and their seller-favourable forms are drawn from our own mandate practice. This article is general information and not legal advice.