Increasing Antitrust And Potentially Other Scrutiny For Defense M&A Deals

Mergers and acquisitions involving companies that conduct business with the federal government present a unique set of challenges. Several statutes and regulations are implicated in such corporate transactions, whether the federal government is a company's smallest customer or its only customer. On March 18, 2024, U.S. Senators Elizabeth Warren (D-Mass.) and Mike Rounds (R-S.D.) sent a letter to the Secretary of Defense suggesting additional hurdles that may soon be put in place.

Recent supply chain issues and other geopolitical concerns have resulted in tangible initiatives to increase the resiliency of the domestic defense industrial base. Specifically, both the Executive Branch and Congress have increased their focus on competition in the defense industrial base because the federal procurement process, by design, relies heavily on competition to drive innovation and control costs. Accordingly, many in the government view M&A and consolidation in the defense