Horizontal Merger Review in 2026: What Changed When the 2023 Guidelines Met Three Years of Real Enforcement

Most founders treat "horizontal merger review" as a single pipeline. It is actually three separate regimes — the Clayton Act § 7 substantive test, the HSR Act premerger notification gauntlet, and the 2023 Merger Guidelines framework — that interact in ways that three years of real enforcement have now tested in court. This article walks through what changed, what survived, and what the FTC v. Kroger and FTC v. Tapestry records actually reveal about how the 2023 Guidelines are landing in federal district courts.

The statutory spine — Clayton Act § 7, HSR, and why 'merger review' is a lineup of separate regimes

When a founder tells me "our lawyers said we'll need antitrust review," I almost always have to slow them down. "Merger review" is shorthand for at least three distinct legal regimes that operate independently, plus a fourth layer of state and private enforcement sitting on top. Clearing one of them does not clear the others. Before you negotiate a sign-and-close timeline, a break fee, or a regulatory-efforts covenant, you need to know which regime does what — because each one fails differently, and each one has its own remedy when it goes wrong.

Start with the substantive law. Section 7 of the Clayton Act, 15 U.S.C. § 18, is the prohibition that actually bans anticompetitive deals. Its operative language forbids acquisitions where the effect "may be substantially to lessen competition, or to tend to create a monopoly." Section 7 applies to every acquisition — every stock swap, every asset purchase, every roll-up — regardless of transaction size. A $5 million tuck-in between two regional competitors is just as subject to Section 7 as a $50 billion megadeal. The Federal Trade Commission and the Department of Justice's Antitrust Division both enforce it, and under Section 16 of the Clayton Act, private parties — typically competitors, customers, or suppliers — can sue for injunctive relief on their own.

Next is the procedural layer. Section 7A of the Clayton Act, 15 U.S.C. § 18a — known universally as the Hart-Scott-Rodino Act, or HSR — is not a substantive prohibition. It is a premerger notification statute. HSR requires parties to certain transactions to file a notification with the agencies, pay a filing fee, and observe a waiting period before closing. Critically, HSR only applies to transactions that clear the statutory thresholds. For deals entered into during calendar year 2026, the size-of-transaction threshold is $133.9 million, and transactions above $535.5 million are reportable regardless of the parties' size. Below those numbers, HSR drops out — but Section 7 does not.

Third is the regulatory mechanics. 16 C.F.R. Parts 801–803 is where HSR actually lives in operation. Part 801 contains the definitions and coverage rules. Part 802 houses the exemptions — the carve-outs that tell you when an otherwise-reportable transaction doesn't actually have to be reported. Part 803 governs the form itself, the notification process, and the waiting-period mechanics. The FTC's Premerger Notification Program publishes the forms and interpretive guidance your filing team will live in. When counsel debates whether a deal is "HSR-reportable," they are almost always arguing about Part 801 coverage or a Part 802 exemption — not about the statute itself.

The right mental model is this: Section 7 is the statute you cannot violate. HSR is the disclosure process that triggers federal review. The 2023 Merger Guidelines are the analytical framework the agencies apply when they look at what you filed. And court enforcement — an FTC administrative proceeding or a DOJ lawsuit in federal district court — is what happens if the reviewing agency doesn't like what it sees. Which agency reviews your deal is a matter of "clearance" between the FTC and DOJ based on industry expertise, not a legal distinction.

And then there is the fourth layer everyone forgets until it bites them. State attorneys general have independent authority to bring their own Section 7 actions, and they increasingly do. When the FTC challenged the Kroger-Albertsons merger, the Washington State Attorney General brought a parallel action in state court and obtained independent relief. A federal clearance does not bind a state AG, and a state injunction can kill a deal the federal agencies were prepared to let through. Plan for all four regimes from the first term sheet.

HSR Act filing in 2026 — thresholds, the vacated form rewrite, and the 30-day clock

Start with the math. Effective February 21, 2026, the Federal Trade Commission's annual threshold adjustment set the size-of-transaction trigger under the Hart-Scott-Rodino Act at $133.9 million. Deals above $535.5 million are reportable regardless of the parties' size. Between those two lines, the size-of-person test applies: one party must have at least $266.5 million in sales or assets, and the other at least $26.7 million. If you are negotiating a deal anywhere near those numbers, model the threshold analysis early — acquisitions of voting securities, non-corporate interests, and assets all count, and aggregation rules across prior acquisitions can push an otherwise sub-threshold deal into reportable territory.

Once a deal is reportable, both buyer and seller file separate notifications under 16 C.F.R. Parts 801-803, and a statutory waiting period begins. The default clock under 15 U.S.C. § 18a(b)(1) is 30 days — 15 days for cash tender offers and for acquisitions out of bankruptcy under Section 363(b). You cannot close during that window. Historically, parties could request early termination to cut the clock short when the agencies had no concerns, but the FTC and DOJ suspended early termination in February 2021 and have not restored it. In 2026, there is no shortcut: you wait out the full period or you get a Second Request.

Now the part founders keep asking about: the form itself. On February 10, 2025, the FTC's rewrite of the HSR form took effect — the most substantial overhaul of HSR notifications in decades. It dramatically expanded document production obligations, added narrative questions about labor-market overlaps, and required detailed transaction-rationale disclosures including deal-team ordinary-course documents. The practical effect was filings that took two to four times longer to prepare.

For a brief window the 2025 form was the law, and deal teams that filed between February 2025 and February 2026 had to comply. That is over. Prepare filings today on the pre-2025 form, and assume the FTC will eventually issue a replacement rule after working through the RFI record. Industry alerts from WilmerHale and Wiley have tracked the litigation and the RFI in detail and are worth monitoring as the replacement rulemaking develops.

Inside the 30-day window, three things can happen. One, the clock expires and the deal is cleared to close — the most common outcome by a wide margin. Two, the agencies grant early termination; this has not occurred since 2021 and founders should not plan around it. Three, the reviewing agency issues a Second Request, which suspends the clock and extends review indefinitely until the parties substantially comply. That third path is what the next section is about, because a Second Request is the moment a routine filing becomes a bet-the-deal event.

The 2023 Merger Guidelines — the eleven guidelines, three years of application, what survived

The 2023 Merger Guidelines went through a visible revision before they became operative. The DOJ and FTC released a draft in July 2023 with thirteen guidelines. The final text, issued December 18, 2023, consolidated that down to eleven. The consolidation was not cosmetic — several draft guidelines were merged, and the labor-market theory was folded into a single dedicated guideline (Guideline 10) rather than dispersed across multiple provisions. Founders should work from the December 2023 final, not the July draft that still floats around in older memos.

The second thing to know is that the Guidelines survived the 2025 administration change. On February 18, 2025, FTC Chairman Andrew Ferguson and Bureau of Competition Director Daniel Guarnera issued staff memos, and DOJ Acting AAG Omeed Assefi issued a parallel memo, confirming that the 2023 Guidelines remain the operative analytical framework for merger review. That bipartisan endorsement — a Republican FTC leadership affirming a document issued under the Khan FTC — is the signal that matters. The Guidelines are not going to be rewritten in the near term, and deal counsel should stop drafting around that hope.

Here is the full list, as issued:

1. Guideline 1: Mergers Raising a Presumption of Illegality Through Market Concentration
2. Guideline 2: Mergers That Eliminate Substantial Competition Between Firms
3. Guideline 3: Mergers That Increase the Risk of Coordination
4. Guideline 4: Mergers That Eliminate a Potential Entrant in a Concentrated Market
5. Guideline 5: Mergers That Create a Firm That May Limit Access to Products or Services That Its Rivals Use to Compete
6. Guideline 6: Mergers That Entrench or Extend a Dominant Position
7. Guideline 7: When an Industry Undergoes a Trend Toward Consolidation, the Guidelines Examine Whether Further Consolidation May Substantially Lessen Competition or Tend to Create a Monopoly
8. Guideline 8: When a Merger Is Part of a Series of Multiple Acquisitions, the Agencies May Examine the Whole Series
9. Guideline 9: When a Merger Involves a Multi-Sided Platform, the Agencies Examine Competition Between Platforms, on a Platform, or to Displace a Platform
10. Guideline 10: When a Merger Involves Competing Buyers, the Agencies Examine Whether It May Substantially Lessen Competition for Workers, Creators, Suppliers, or Other Providers
11. Guideline 11: When an Acquisition Involves Partial Ownership or Minority Interests, the Agencies Examine Its Impact on Competition

Guideline 1 is the one that decides most deals before the agencies get to anything more interesting. It sets two independent triggers for a structural presumption of illegality. The first is HHI-based: a post-merger Herfindahl-Hirschman Index above 1,800 paired with a change (delta) of 100 points or more. The second is share-based: a merger to a firm with a post-merger share of 30% or more, paired with a delta of 100 points. Either trigger alone is enough to flip the burden of proof to the merging parties. Both thresholds are stricter than the 2010 Horizontal Merger Guidelines, which used an HHI floor of 2,500.

The 30% share threshold is not invented from agency discretion. Guideline 1 traces it to United States v. Philadelphia National Bank, 374 U.S. 321 (1963), where the Supreme Court held that a merger producing an "undue percentage share" of a concentrated market is presumptively illegal. The 2023 Guidelines revive that lineage explicitly, and that doctrinal grounding is what gives Guideline 1 its teeth when agencies argue it to courts.

Courts, for their part, have not adopted the Guidelines as binding law. In FTC v. Kroger Co. (D. Or. 2024), the district court treated the 2023 Guidelines as persuasive authority — relevant to the competitive-effects analysis, but not a substitute for the underlying Clayton Act case law. That is the practical status three years in. The Guidelines frame the agencies' theory of harm and signal how they will staff an investigation, but in litigation they sit alongside Philadelphia National Bank, Baker Hughes, and the rest of the Section 7 canon rather than replacing it.

HHI math in practice — market definition, concentration thresholds, and the guidelines-vs.-statute gap

Before a founder's deal team gets into a spreadsheet fight about concentration numbers, it helps to separate two things that often get conflated. The Herfindahl-Hirschman Index is a tool. Section 7 of the Clayton Act is the law. Section 7 prohibits acquisitions whose effect "may be substantially to lessen competition," and it says nothing about HHI, thresholds, or market shares. HHI is the analytical shorthand the agencies and courts have adopted to predict when a merger is likely to cross that statutory line. Keeping the tool and the statute straight matters, because courts are bound by the statute and by Supreme Court precedent — not by whatever number the 2023 Merger Guidelines put in a box.

The math itself is simple. You sum the squared market shares of every firm in the relevant market to get the pre-merger HHI. The change caused by the deal (the "delta") equals twice the product of the merging firms' shares. Add the delta to the pre-merger HHI and you have your post-merger number. Two firms at 20% each combining in a fragmented market produces a delta of 800 — enough, by itself, to trigger serious scrutiny under the 2023 framework.

Guideline 1 of the 2023 Merger Guidelines lays out two triggers for a structural presumption of illegality. The first: a post-merger HHI above 1,800 paired with an increase of 100 points or more. The second: a merger to a firm with a 30% or greater post-merger share, again paired with a 100-point increase. Neither is new law. The 30% floor traces directly to United States v. Philadelphia National Bank, where the Supreme Court held in 1963 that a merger producing a firm controlling "an undue percentage share of the relevant market" is presumptively unlawful. What the 2023 Guidelines did was tighten the numbers the agencies use to operationalize that presumption — the 2010 Horizontal Merger Guidelines had used 2,500 and 200 as the equivalent HHI thresholds. Once the government makes its prima facie case with this math, the burden shifts to the defendants to rebut it, and then back to the government, under the framework then-Judge Ruth Bader Ginsburg articulated in United States v. Baker Hughes Inc.

Here is the part founders tend to miss: the HHI number is not a fact about your deal. It is a product of how the market is defined. Define the market broadly and your shares shrink; define it narrowly and they balloon. The standard tool for drawing that line is the hypothetical monopolist test, often called the SSNIP test — would a hypothetical monopolist over the proposed set of products profitably impose a small but significant non-transitory increase in price, typically 5%? If yes, the market is defined tightly enough. Courts apply this test case by case, as the D.C. District did in United States v. H&R Block.

The FTC v. Kroger litigation shows how consequential that exercise is. The merging parties argued the relevant market was retail grocery broadly; the FTC successfully litigated much narrower markets, including "premium fresh grocery" and "union grocery labor." Same deal, radically different HHI outcomes depending on which market the court accepts.

Which brings us back to the guidelines-vs.-statute gap. Courts have treated the 2023 Guidelines as persuasive authority, not binding law — the Kroger opinion itself acknowledged the Guidelines' evolving role rather than deferring to them outright. If your deal analysis rests on being below the Guidelines' thresholds under a generous market definition, you have not actually derisked the transaction. You have derisked one version of it, under assumptions the agency may reject and a court may never reach.

The enforcement record — Kroger-Albertsons and Tapestry-Capri: what the courts actually did with the 2023 Guidelines

Three years into the 2023 Merger Guidelines, the most honest answer to "how are courts applying them?" is that we have two high-profile district court opinions, no appellate merits rulings, and a consistent pattern: the agencies win the preliminary injunction, the deal dies the next week, and nobody gets to test the Guidelines on appeal. That is the enforcement record. If you are a founder evaluating a transaction with real concentration risk, you should plan around that shape rather than the theoretical one.

Start with FTC v. Kroger Co. (No. 3:24-cv-00347 (D. Or.)). On December 10, 2024, Judge Adrienne Nelson granted the FTC's preliminary injunction against the $24.6 billion Kroger-Albertsons tie-up. The fight, as it usually is in a Section 7 case, was market definition. The court accepted the FTC's framing of two relevant markets — "supermarkets" and "union grocery labor" — and from there the arithmetic did most of the work. Post-merger HHIs in numerous local markets cleared the Guideline 1 thresholds, and under the structural presumption that traces back to United States v. Philadelphia National Bank, 374 U.S. 321 (1963), the burden shifted to the parties to rebut. They could not do so to the court's satisfaction. One day after the opinion, on December 11, 2024, Kroger and Albertsons terminated the deal. The same day, Albertsons sued Kroger seeking $6 billion in breach-of-contract damages plus the $600 million termination fee, alleging "half-hearted regulatory efforts." A parallel state action by the Washington Attorney General succeeded on a similar theory. No appellate opinion exists because there was nothing left to appeal.

The pattern repeated in FTC v. Tapestry, Inc. (No. 1:24-cv-03109 (S.D.N.Y.)). On October 24, 2024, Judge Jennifer Rochon granted the FTC's preliminary injunction blocking Tapestry's $8.5 billion acquisition of Capri. The FTC's market-definition theory was narrow and contested: "accessible luxury handbags," a segment the agency drew to include Coach, Kate Spade, Michael Kors, Karl Lagerfeld, and Versace. Tapestry argued the market was broader and that consumers cross-shop across price tiers. The court sided with the FTC. Tapestry filed a notice of appeal on October 28, 2024 — four days later — but by November, Tapestry and Capri had terminated the transaction before the Second Circuit could reach the merits. Again: a district court opinion, no appellate ruling, a dead deal.

Step back and the through-line is sharper than either opinion standing alone. In both cases, the FTC offered narrow relevant markets, the courts accepted them at the PI stage, and the structural presumption did the rest. Both opinions gave the 2023 Guidelines persuasive weight — particularly on the concentration thresholds — but anchored their legal reasoning in Philadelphia National Bank and in the burden-shifting framework of United States v. Baker Hughes Inc., 908 F.2d 981 (D.C. Cir. 1990). That matters because it means the Guidelines' specific new theories — labor monopsony, serial acquisitions, platform effects — have not yet been tested in a circuit court in a merger case. The reach of the 2023 Guidelines above the district court level is still an open question, and will remain one until an agency loses a PI and appeals, or wins one and a party is willing to fight through the abandonment economics.

For founders, the operational lesson is blunt. The preliminary injunction is the case. If the agency wins at PI, the transaction almost certainly dies — not because the law compels abandonment, but because the financing, the management distraction, and the litigation spend make a year-plus merits trial economically irrational. Structure the deal on that assumption. Negotiate the termination fee, the regulatory-efforts covenant, and the outside date with the PI hearing as the real decision point, because in 2024 that is exactly where both of the year's defining horizontal mergers ended.

Practical playbook — when to file, what to pre-clear, and how to survive a Second Request

The goal of a modern HSR playbook is not to avoid review. It is to structure the deal so it survives review, and to structure the deal economics so the parties survive a loss. Founders who treat HSR filing as a check-the-box exercise at signing have already lost the first round. The work starts months before the letter of intent.

Pre-LOI: diligence the antitrust risk before you diligence the balance sheet

Before you sign anything binding, run the same analysis the agencies will run. Four steps, in order:

• Run a preliminary Herfindahl-Hirschman Index analysis on every plausible relevant market the combined business would touch. Identify horizontal overlaps and the product-market theories the FTC or DOJ could use against you — narrow markets produce scary HHIs, and the agencies know how to draw them narrowly.
• Check whether the deal sits in a current enforcement-priority sector: labor markets, healthcare, tech platforms, groceries, pharmacy, and housing. Deals in these sectors draw heightened scrutiny regardless of size.
• Pull the FTC and DOJ press release archives for comparable deals over the last 24 months. If the agencies have blocked, sued, or extracted consent decrees on similar transactions, price that risk in now.
• Confirm the 2026 filing thresholds. Under the FTC's annual adjustment, a transaction is reportable if it exceeds $133.9 million, and size-of-person no longer matters above $535.5 million. The size-of-person test itself sits at $26.7 million / $266.5 million. These took effect February 21, 2026.

Signing phase: the deal protection provisions that matter

Assume a Second Request is possible and draft accordingly. The Kroger-Albertsons litigation made clear that sellers will sue buyers for "half-hearted regulatory efforts" when deals fail — your regulatory covenants are now a litigation exhibit. Negotiate with that in mind:

• Regulatory efforts standard. Sellers push for "hell or high water" (the buyer must accept any divestiture or condition to close). Buyers push back to "reasonable best efforts." Whatever you land on, define divestiture commitments with specificity — vague covenants produce lawsuits, not closings.
• Termination fee. Kroger-Albertsons carried a $600 million reverse termination fee. Size the fee to match the risk profile and the seller's standalone damage from a failed deal.
• Outside date. Build the drop-dead date to accommodate a full Second Request cycle plus preliminary injunction litigation — realistically 12 to 18 months from signing.
• Clean-team and clean-room protocols. Competitively sensitive information moves only through designated personnel and outside counsel during the pendency period. Gun-jumping is a separate violation under Section 7A of the Clayton Act.

Filing phase: what the 30-day clock buys you

Filing starts a 30-day statutory waiting period under 15 U.S.C. § 18a(b)(1) — 15 days for cash tender offers and bankruptcy transactions. Early termination has been suspended since 2021 and remains suspended, so do not plan around it. Use the pre-2025 HSR form: the February 2025 rewrite was vacated in Chamber of Commerce v. FTC on February 12, 2026, and the Fifth Circuit denied the FTC's stay request on March 19, 2026. The FTC issued an RFI on March 25, 2026 soliciting input on a revised rule, but until that process concludes the pre-2025 form governs.

Second Request: the document war

A Second Request under 15 U.S.C. § 18a(e) extends the waiting period until 30 days after both parties substantially comply. Compliance typically takes two to six months and is expensive — seven figures for any meaningful deal. Expect to identify 20 to 40 custodians whose email and files get pulled, produce documents in the millions of pages, and answer narrative interrogatories on market definition and competitive effects. Engage your expert economist before you file, not after the request arrives. The agencies have economists drafting HHI rebuttals and market-definition theories in parallel; you need the same firepower.

One final realism check: if the FTC or DOJ files for a preliminary injunction and wins, the deal is over. Appellate vindication months later will not resurrect it — the financing, the management team, and the commercial rationale will have moved on. Price that outcome into the termination fee, the outside date, and the standalone operating plans for both companies. Plan the deal to close. Plan the economics to survive if it doesn't.

Considering an acquisition or being acquired? Promise Legal handles transaction structuring, antitrust clearance analysis, and HSR filings for founders and growing companies. Book an intake at https://promise.legal#contact.