Key points:
- FTC and DOJ antitrust teams are operating at less than 60% capacity, slowing Hart-Scott-Rodino Act reviews.
- CFIUS timelines are paused entirely, delaying national-security-sensitive deals.
- Law firms warn of higher costs and uncertainty for Q4 mergers, particularly in energy and tech.
- Pull-and-refile strategies could compound delays and complicate negotiations.
According to Bloomberg Law, the Federal Trade Commission (FTC) and Department of Justice (DOJ) are processing premerger filings with significantly reduced staff as the government shutdown reaches Day 10. These agencies, which screen transactions under the Hart-Scott-Rodino (HSR) Act to prevent anticompetitive behavior, are running with roughly 40% of their normal workforce.
Law firms including Bradley Arant Boult Cummings LLP, Foley & Lardner LLP, and Milbank LLP have begun warning clients that merger reviews could take substantially longer. The delays come on top of expanded merger-disclosure rules introduced earlier this year that have already doubled typical review times.
The Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) is also affected. Under federal rules, all review deadlines are automatically paused during a shutdown—an issue that Arnold & Porter notes could push national-security-sensitive transactions well into 2025.
“Time kills transactions,” said Mark Pendleton, a partner at Bradley Arant, describing how delayed approvals could hurt private-equity-backed deals, where returns depend on quick closings. Among transactions now facing uncertainty are Constellation Energy’s acquisition of Calpine Corp., Berkshire Hathaway’s purchase of OxyChem, and Sunoco LP’s acquisition of Parkland Corp.
Even relatively simple mergers without antitrust red flags must endure the full 30-day statutory HSR waiting period. The option to terminate that period early—reintroduced during the previous administration—was suspended when the FTC furloughed staff on Oct. 1, according to Foley & Lardner partner Greg Neppl.
Some companies may opt to “pull and refile” their notifications to give the agencies more time. But that strategy can extend timelines, increase transaction costs, and strain negotiations, said Hunton partner Kevin Hahm. If regulators issue “second requests” for more data—comprehensive document subpoenas that can stretch nearly a year—the impact could be “very serious.”
The overall disruption, attorneys say, depends on how long the shutdown lasts. “Everyone’s hoping this is a game of chicken and everything goes back to normal quickly,” Pendleton said.
