Bloomberg Law
Jan. 4, 2023, 10:00 AM

Cooling M&A Activity Portends Focus Shift for Antitrust Agencies

Dan Papscun
Dan Papscun

Declining merger and acquisition activity will lighten antitrust regulators’ merger review workload, setting them up to focus more on cracking down on conduct that violates federal antitrust law.

The number of M&A deals in the US has sunk year-over-year to 4,573 in the third quarter of 2022 from 5,240 in the year-earlier period, according to Bloomberg data.

Any merger at or above $101 million in value requires either the Federal Trade Commission or the Justice Department’s antitrust division’s approval after a period of “Hart-Scott-Rodino” (HSR) review on whether the deal would have anti-competitive effects.

A slowdown in M&A activity will give agency leadership their first respite from a wave of filings and more resources to turn their attention to pursuing cases alleging companies’ market power abuse, attorneys say.

The declining deal numbers come at a time when federal antitrust regulators, under the Biden administration, vowed to pursue more thorough, and even perhaps prolonged, M&A reviews. But a shift in their oversight focus brought on by the slowdown also would give them opportunities to fortify their other priority—to address existing violations in industries that have sometimes avoided antitrust scrutiny in recent years.

Healthcare, tech and private equity industries—as well as employers pushing the boundaries of their hiring power—in particular could feel the pinch in the regulators’ enforcement shift.

“When there are lots of HSR filings, the agencies struggle with resources to look at conduct-related matters,” said Leigh Oliver, a partner at Clifford Chance. “I’ve heard this from the agency staff: they have limited resources, and if they’re pulled into a merger investigation, they have less time to focus on conduct cases, and thus those can take longer to work through the process.”

A prominent example of conduct-based enforcement actions include the FTC’s lawsuit alleging agricultural giants Syngenta AG and Corteva Inc. engaged in a “pay to block” scheme to incentivize distributors to stifle their purchases of competitors’ generic pesticides. The DOJ’s antitrust division brought a series of criminal conduct cases this year—mostly without success—targeting alleged labor violations and price fixing in the chicken industry.

“I expect we’ll see more activity of this sort going forward—i.e., Sherman Act challenges that bring to bear all the creativity of prior successful enforcement in this area to challenge exclusionary conduct by dominant, vertically-integrated players in concentrated industries,” Kathy O’Neill, a partner at Cooley who was until recently the director of investigations and litigation at the DOJ’s antitrust division, wrote in an email.

“Continued economic and geopolitical uncertainty and overall volatility for deal parties seems likely to have contributed to the continued, lower levels of activity seen in 2022,” said Bloomberg Law analyst Emily Rouleau.

Sherman Act Enforcement

M&A lawyers also say they hope the greater flexibility will also reduce the waiting times companies face after sending HSR merger alert filings to the agencies.

Once companies report their plan to merge, the DOJ or FTC typically have 30 days to either greenlight the deal or issue a “second request” for additional information. The regulators can also decide to end merger reviews on some non-controversial deals early through an “early termination” notice.

M&A activity unfolded at a feverish pace in early 2021, pressuring the agencies to respond following their HSR review. As HSR filings piled up, the FTC and DOJ announced they were tweaking the HSR policy to stop granting early termination notices. That in effect tells companies that regulators will take all of the 30 days and may even extend the second request review process.

Significant merger investigations by the agencies take even longer, according to data compiled by the law firm Dechert. The average is 11.3 months as of the end of the third quarter of 2022, up from the 8.1 month average between 2011 and 2016.

“In certain transaction investigations that I’ve seen, you have fewer resources to do (speedy merger reviews) if you only have a couple of attorneys on a second request,” Oliver said. “The benefit to merging parties arguably should be that the agencies are able to move things along more quickly, identify where there are real issues and resolve things more efficiently.”

The agencies have not released data on the number of HSR filings for fiscal year 2021, but M&A activity indicates HSR filings are similarly high.

The FTC and DOJ also may be fortified by additional money in the spending package passed by the House and Senate at the end of December.

More time and resources for the agencies also could lead to stronger cases.

Their lawyers could “bring to bear all the creativity of prior successful enforcement” of Sherman Act violations, O’Neill said.

“I believe 2023 will be the year of Sherman Act enforcement, which presents a real opportunity for companies that have been on the receiving end of exclusionary behavior to bring their complaints to the agencies,” said O’Neill.

To contact the reporter on this story: Dan Papscun in Washington at

To contact the editor responsible for this story: Roger Yu at; Maria Chutchian at