The choice of when to propose a merger remedy has become one of the most consequential decisions deal teams make. Regulators at the Federal Trade Commission and the Department of Justice are now signaling that early, good-faith engagement gets rewarded, while remedies held back for litigation get treated as evasive.
The implications extend beyond legal and procedural. For deal teams, this is a communications and reputational issue. The moment a remedy enters the picture, whether during HSR review or in response to a complaint, boards, investors, counterparties, and the press start to pay attention. FGS advises clients at this intersection, helping deal teams develop a divestiture package and the narrative and stakeholder strategy that will determine how the remedy lands. In an environment where early engagement is the expected posture, that preparation must happen on the same timeline as the legal work.
Where the agencies stand
Chairman Ferguson’s opening remarks at an FTC workshop earlier this year provided a precise definition of the problem antitrust enforcers are facing. Litigating the fix is the practice of merging parties presenting a unilateral remedy, typically a divestiture, not to the agencies during HSR review but to the court after the government has sued. The government is then left litigating two cases at once on a compressed schedule: the original deal's effect on competition and the remedy's adequacy. The timing is the abuse. Ferguson called it "a chance for the merging parties to muddy the water," a dynamic that shifts bargaining power decisively in the merging parties' favor.
Ferguson traced the dynamic directly to the prior administration. According to Ferguson, past hostility to mergers and refusal to negotiate gave parties little reason to engage on remedies early and every reason to take their chances in court. That calculus has changed. He has made it clear that the Trump administration is "open to negotiating settlements" in good faith, and if the Commission is confident a remedy will prevent a substantial lessening of competition, "it is our obligation to accept that settlement." The bar has not been lowered. The conversation is now available.
The procedural answer may be to amend the HSR rules. The agencies currently lack any mechanism to extend the waiting period once parties have certified substantial compliance, which means a late-breaking remedy or new buyer cannot be meaningfully reviewed before the deal closes or litigation begins.
A joint FTC-DOJ Request for Information on HSR reform has now specifically asked whether parties proposing a remedy after substantial compliance should be required to file a new HSR notification, restarting the review clock. Whether or not that procedural change is adopted, the cultural shift it reflects is already here.
How deal teams should respond: Four implications for M&A strategy
The remedy analysis should begin before the filing, not after. If a transaction has any plausible problem theory, the divestiture package, the upfront buyer, and the supporting financial story should be fully developed before the initial HSR filing. Late proposals will increasingly be treated as evasive rather than constructive — and procedural rules may soon make them impossible.
Budget for a longer clock. Even before any rulemaking is final, the cultural shift is already here. A material restructuring or new divestiture buyer should be treated as a reset event. Deal timelines, flex financing, and walk-rights should be sized accordingly. If a supplemental filing requirement is adopted, the interaction with Second Request timing will need to be worked through, and merger agreement risk allocations will need to reflect it.
Structural remedies remain the highest-probability path. The FTC and DOJ have both signaled strong preference for clean structural remedies and "substantial caution" on behavioral fixes. A complete divestiture package with an upfront buyer, presented during the investigation, is the right posture.
Early engagement is now the dominant strategy. The current administration’s diagnosis was that litigating-the-fix became prevalent under the prior administration, because merging parties believed settlement remedies were not an option to achieve regulatory clearance. Counsel who default to a litigation posture out of habit are leaving value on the table. The agencies have said the settlement negotiation is real and deal teams should treat it that way.
Regulators have signaled openness; the question now is whether deal teams are structured to take advantage of it. That means remedy analysis built into the pre-filing process, stakeholder and communications strategy developed on the same timeline as the legal work, and merger agreements sized for a world where a material restructuring is a reset event, not an exception. The firms that move earliest — with a complete package and a coherent story — are best positioned to reach clearance efficiently.