California Becomes Latest State to Enact Broad ‘Mini-HSR’ Act

California Governor Gavin Newsom recently signed into law Senate Bill 25 (SB 25), which will require certain deal parties who submit premerger filings to the US federal government under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act to share the HSR submission with the California attorney general (AG).

Unlike California’s existing premerger notification laws, which apply only to certain industries, SB 25 is industry agnostic.[1] When SB 25 becomes effective on January 1, 2027, California will join Colorado and Washington—and likely even more states considering similar legislation—as states with general “mini-HSR” acts.[2]

SIMILARITIES TO EXISTING ‘MINI-HSR’ ACTS IN COLORADO AND WASHINGTON

California, Colorado, and Washington State’s general “mini-HSR” acts are adopted from the Uniform Antitrust Pre-Merger Notification Act (UAPNA), a piece of model legislation published by the Uniform Law Commission, a nonprofit group, in 2024. Indeed, SB 25 is identical to Colorado and Washington’s statutes in most respects.

Under SB 25, a party to an HSR-reportable transaction must also notify the California AG if any of following circumstances are met:

• The party as its principal place of business in California.
• The party does not have its principal place of business in California, but generates in-state net annual sales of the goods or services involved in the transaction of at least 20% of the HSR Act’s size-of-transaction threshold. (The current HSR threshold is $133.9 million, meaning the California filing threshold in January 2027 will be $26.78 million, but this will change as the US Federal Trade Commission adjusts this HSR threshold annually every February).

Under the first trigger, while SB 25 does not define “principal place of business,” the comments to the UAPNA define the term as “the place where a corporation’s officers direct, control, and coordinate the corporation’s activities.”[3] The first trigger requires a deal party to submit its HSR form plus all accompanying documentary materials.[4]

Under the second trigger, parties must assess in-state revenues “for goods or services involved in the transaction.” While SB 25 does not define this phrase, SB 25 looks to other UAPNA states for guidance,[5] and Washington has clarified that parties should look to product or service descriptions in the HSR form.[6] If this definition is used in California, this means that all of the target’s in-state goods and services being acquired through the deal are usually considered as “goods or services involved in the transaction,” while the buyer has more flexibility to determine which of its products and services qualify as being “involved in the transaction.”[7] The second trigger requires a deal party to submit only its HSR form initially, but the California AG may request the submission of the accompanying documentary materials.

SB 25 does not impose a waiting period that deal parties must observe before closing (but other state “mini-HSR” acts or the federal HSR Act may impose waiting periods).

KEY DIFFERENCES FROM EXISTING ‘MINI-HSR’ ACTS IN COLORADO AND WASHINGTON

SB 25 differs from the UAPNAs enacted in Colorado and Washington in several respects:

Looking Ahead

Deal parties should expect more states to enact their own industry-agnostic “mini-HSR” acts. So far, Hawaii, Indiana, West Virginia, and the District of Columbia have proposed laws modeled on the UAPNA. Further, the New York legislature is considering a “mini-HSR” act more expansive than the UAPNA that would require “any person conducting business” within New York—regardless of in-state revenues—to submit their HSR form and accompanying documentary materials to the New York AG.

As these industry agnostic “mini-HSR” acts become more common, deal parties should carefully consider how these laws affect deal timing and closing risk, how state confidentiality laws protect transaction-related information and materials, and how to account for these considerations in merger agreement negotiations.