California Joins the Growing Wave of State Pre-Merger Notification Requirements

The law seeks to address a key merger control issue: State Attorneys General have a legal right to challenge anticompetitive mergers, but they do not get notice of deals and do not get access to party information that is disclosed to the Federal Trade Commission or U.S. Department of Justice without party consent. 

The new law will remedy this state concern, but it also creates additional costs and uncertainties for merging parties.

State notification laws, including California’s, would not require any additional information not captured in the HSR filing.  It would only require parties submitting a federal HSR filing to also submit their materials with the state Attorney General if the following thresholds are met: (1) if the filing person has its principal place of business in California or (2) if the filing person or a person it controls directly or indirectly had annual net sales in this state of the goods or services involved in the transaction of at least 20 percent of the filing threshold (approximately $26.78 million when the law will go into effect). 

There are three other notable features.  First, the California statute would authorize fines of up to $25,000 per day of non-compliance.  Second, filing parties must submit their materials to the California AG within one-business day of their HSR filing.  Finally, California’s law authorizes the Attorney General to charge a filing fee ranging from $500 to $1,000.

Other states appear poised to follow, with Indiana governor Mike Braun expected to sign a state notification law sometime this month, which would take effect on July 1, 2026. California’s adoption of a state premerger notification program, however, is particularly significant given the state’s role as a hub for technology companies. With additional states considering similar legislation, parties to HSR-reportable transactions should prepare for an increasingly complex, multi-jurisdictional pre-merger notification landscape.