DoW’s role in merger reviews

Per the DoW M&A Division’s published policy, the DoW’s role is to collaborate with the DOJ and FTC to assess the impact of HSR-reportable mergers and acquisitions on national security and on the DoW’s industrial, technological, and innovation base. In furtherance of that assessment, the DoW engages in the following activities:

• Coordination with the relevant military program offices that depend on the merging firms’ products or services;
• Participation in agency briefings and presentations alongside FTC and DOJ staff;
• Direct engagement with the parties to obtain supplemental materials; and
• Preparation of recommendations that inform the antitrust agencies’ enforcement posture.

While the FTC and DOJ maintain enforcement decision-making authority, DoW input can be highly influential, as it is the primary customer for defense products. In a 2016 joint statement, the DOJ and FTC explained that the DoW serves a critical role in regulatory reviews of aerospace and defense deals. The DOJ and FTC explain that “the agencies rely on [DoW’s] expertise, often as the only purchaser, to evaluate the competitive impact of mergers, teaming agreements, and other joint business arrangements between firms in the defense industry.” Within the defense sector, the antitrust regulators and the DoW are particularly concerned with how mergers may adversely affect short- and long-term innovation critical to national security and consolidation of the defense supply base.

The DoW’s historical practice for merger reviews

Historically, prior to the passage of the 2024 NDAA, aerospace and defense-related HSR-reportable deals were subject to review by the DOJ or the FTC, which would consult with the DoW on an as-needed basis. If a transaction raised issues relevant to the DoW, the agencies would typically request party waivers to share confidential filings with the DoW. The DoW, in turn, would conduct its own investigation of the merger, including reaching out to the specific military program offices implicated by the deal, before providing a recommendation to the antitrust regulators on whether the deal needed further investigation, such as through an HSR second request. There was no statutory policy in place requiring parties to submit their HSR filings to the DoW.

Passage of the FY24 NDAA

Two months prior to the passage of the NDAA, in October 2023, and because of concerns around consolidation of the defense industrial base, the Government Accountability Office (GAO) released a report studying the sufficiency of the DoW merger-review process. The GAO estimated that hundreds of defense companies engage in M&A deals each year – the DoW reported approximately 400 defense M&A deals that occurred in 2017 alone – but the DoW’s visibility into those deals was limited, with the DoW only assessing an average of 40 deals per year from 2018 to 2022. The report indicated that DoW policy did not provide clear guidance on which deals should be prioritized for assessment and the DoW lacked the necessary staff and resources to initiate regulatory reviews of additional deals.

Following this report, the FY24 NDAA was passed in December 2023, which included a new requirement that merging parties that had HSR-reportable deals “that will require a review by the [DoW] … shall concurrently provide such information to the [DoW] during the waiting period.” The statute was ambiguous and did not provide clear guidance for which deals should be reported to the DoW or how parties should provide their HSR filings to the DoW, and the DoW did not publish any procedures or regulations. In practice, parties would submit their HSR filings if requested by the DoW rather than affirmatively providing the materials.

2026 policy change

In a procedural shift, the DoW announced on February 2, 2026, that parties to transactions meeting certain criteria must now affirmatively submit their HSR filings to the DoW. The new requirement – outlined in a notice published on the DoW’s Industrial Base Policy website – formalizes the process.

Criteria for required filings

Parties must notify the DoW if a proposed transaction meets one or more of the following criteria:

• Defense Directed Business: Either party currently contracts, has previously contracted, or intends to contract with the DoW or perform as a subcontractor on a DoW contract.
• Critical Technologies: The transaction involves any of six critical technology areas vital to national security: Applied AI, Biomanufacturing, Contested Logistics Technologies, Quantum and Battlefield Information Dominance, Scaled Hypersonics, or Scaled Directed Energy.
• Defense Industrial Base Sector: The transaction involves elements of the US Department of Homeland Security’s Defense Industrial Base critical infrastructure sector.
• Intellectual Property: One or more parties hold patents, trademarks, copyright protections, or trade secrets in the above-listed critical technologies or critical infrastructure.

Upon notification, the DoW will respond within one business day with instructions for secure submission of the HSR filing and any additional materials.

Practical takeaways for merging parties

For companies that directly or indirectly serve the DoW or the military branches or that operate in any of the listed critical technologies, the DoW notification requirement introduces new procedural steps and timing considerations:

• Early assessment: Companies must evaluate NDAA §857 applicability during the early stages of HSR preparation to determine whether the transaction will trigger DoW reporting requirements.
• Engagement with the DoW: For transactions in which it is unclear whether reporting requirements are triggered, it may be necessary for early engagement with DoW staff to make a final determination on whether to provide the filing.
• Prepare for interaction: The DoW will now receive filings that they would not have seen in the past, making it more likely that DoW staff will elect to participate in agency briefings; parties should be prepared with relevant content addressing customer-specific concerns.
• Non-merger HSR filings: Unless there is subsequent guidance providing carveouts, the current policy seems to capture HSR filings covering minority acquisitions such as executive compensation or activist investments if the target business meets the aforementioned criteria; parties will need to think critically about whether non-merger HSR filings must still be submitted to DoW.

In short, while this policy change adds additional procedural burdens on merging parties, from a practical perspective this shift should not change how parties work with the DoW for transactions where the FTC and DOJ would have referred the deal to the DoW in the past. However, parties need to be prepared for involvement from the DoW on deals that may not have garnered interest under the prior framework but trigger reporting requirements under the new policy.