1. Screen Federal Requirements before Setting the Closing Path
Federal obligations vary with deal structure, value, assets, ownership, and the parties involved. Early screening separates required filings from negotiated protections and helps keep regulatory work aligned with the closing schedule.
Map the Deal before Filing
- Identify whether the deal involves stock, assets, or another ownership interest.
- Review deal value, ownership changes, real property, and regulated assets.
- Separate federal requirements from state-law approvals and notices.
This work can proceed with broader corporate due diligence. The focus is on issues that may affect signing, closing, or post-closing obligations.
Keep Contract Duties Separate
- Define required approvals and closing conditions in the transaction documents.
- Address representations, indemnification, escrow, and notices by agreement.
- Treat MAC provisions as negotiated terms, not automatic federal requirements.
Purchase agreements allocate contractual risk but do not replace regulatory compliance. Their terms should match the filings and approvals that apply to the deal.
2. Check Hart-Scott-Rodino Filing Requirements Early
HSR analysis should begin before the parties settle on a closing date. For transactions closing on or after February 17, 2026, the minimum size-of-transaction threshold is $133.9 million. Other tests and exemptions may still determine reportability.
Determine Whether HSR Applies
- Calculate transaction size under the applicable HSR rules.
- Review the parties and structure for additional tests or exemptions.
- Confirm the threshold in effect for the transaction.
HSR review is part of broader antitrust analysis. When notification is required, the parties generally must file and observe the applicable waiting period before closing.
Build the Waiting Period into the Schedule
| HSR Issue | 2026 Planning Point |
|---|---|
| Minimum transaction threshold | $133.9 million |
| Most reportable transactions | 30-day initial period |
| Certain tender or bankruptcy deals | 15-day initial period |
| Early termination | May be requested; agencies decide |
Minimum transaction threshold
- 2026 Planning Point$133.9 million
Most reportable transactions
- 2026 Planning Point30-day initial period
Certain tender or bankruptcy deals
- 2026 Planning Point15-day initial period
Early termination
- 2026 Planning PointMay be requested; agencies decide
A Second Request can extend agency review. The closing schedule should therefore account for regulatory review rather than depend on early termination.
3. Coordinate Securities and Environmental Due Diligence
Public-company deals may raise securities obligations, while real-property acquisitions can call for environmental liability review.
Review Securities Issues during Negotiations
- Identify material nonpublic transaction information.
- Limit access and assess trading restrictions during negotiations.
- Review SEC reporting duties when a reporting company is involved.
Federal securities duties vary by issuer and transaction. Deal-specific analysis should accompany broader securities regulation review rather than assume one disclosure rule applies to each acquisition.
Assess Environmental Exposure
- Determine whether real property presents contamination concerns.
- Consider whether a Phase I ESA will be used for All Appropriate Inquiries.
- Use Phase I findings to assess whether further investigation may be appropriate.
Under CERCLA, AAI is one element of certain landowner liability protections when those protections are sought. EPA recognizes qualifying ASTM Phase I standards for AAI. Phase II is not automatically required after Phase I.
4. Review Federal Tax Issues before Closing
Tax rules can affect closing mechanics and deal economics. FIRPTA may apply when a foreign person disposes of a U.S. .eal property interest. A qualifying stock acquisition may also permit a Section 338 election.
Check FIRPTA Withholding
- Confirm whether the transferor is foreign and the property is a U.S. .eal property interest.
- Review certifications, exceptions, or withholding certificates.
- Prepare Forms 8288 and 8288-A when required.
When section 1445(a) applies, the transferee generally withholds 15% of the amount realized. Form 8288 and the tax generally are due by the 20th day after transfer, subject to applicable exceptions and withholding-certificate procedures.
Evaluate a Section 338 Election
- Confirm the acquisition qualifies for the contemplated election.
- Identify the parties required for a Section 338(h)(10) election.
- Calendar Form 8023.
A Section 338(h)(10) election is limited to qualifying transactions. Form 8023 generally must be filed by the 15th day of the ninth month after the acquisition date.
5. Connect Closing Conditions to Post-Closing Risk
Regulatory duties and negotiated risk allocation meet in the purchase agreement. Required filings and approvals should remain distinct from contractual remedies, while state-law issues should be reviewed separately.
Document Conditions and Risk Allocation
- State which conditions must be satisfied or validly waived.
- Define MAC provisions as contractual standards.
- Set indemnification, escrow, and claim-notice terms precisely.
These provisions depend on the agreement and governing law. Drafting issues can be coordinated with purchase agreement review.
Separate State-Law Issues
- Check applicable bulk-sale or creditor-notice rules.
- Review state securities requirements when relevant.
- Assess successor liability under governing law.
These are not uniform federal requirements. Their application can vary with jurisdiction, deal structure, industry, and the liabilities involved.
6. Frequently Asked Questions
Does an acquisition over $133.9 million automatically require an HSR filing?
No. The 2026 threshold is a starting point. Other HSR tests, transaction structure, and exemptions may affect reportability.
Which HSR form applies in 2026?
The agencies currently accept the Form and Instructions used before February 10, 2025. They also accept the later form when filers voluntarily use it.
Is Phase II required after every Phase I?
No. Phase I findings may support further investigation, but Phase II is not an automatic federal requirement.
Who handles FIRPTA withholding when it applies?
The transferee generally acts as withholding agent. Certifications, exceptions, and IRS withholding certificates can affect the procedure.
7. Coordinate M&A Compliance with SJKP
M&A transactions can place antitrust, securities, environmental, tax, and contractual issues on one closing calendar. SJKP's attorneys can review the deal structure, regulatory issues, due diligence, and closing documentation. Contact SJKP to discuss federal compliance considerations that may affect a proposed acquisition.
30 Sep, 2026
