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Don't let the 'Blue Tsunami' sink your deal: Government shutdown risk could delay CFIUS and HSR
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Authors: Jonathan Gafni, John Eichlin
With the recent US elections now in the rear-view mirror, eyes are looking ahead to January when a majority control of both houses of Congress will change from the Republican Party to the Democratic Party. This shift increases the likelihood of a US government shutdown that could delay the review of transactions by the Committee on Foreign Investment in the United States (CFIUS) and the federal antitrust enforcers.
A government shutdown over funding disputes is not unprecedented. In October 2025, the US government was fully shutdown for lack of funding legislation for 43 days—the longest shutdown in US history—even though the Republicans held the White House and majorities in both houses of Congress. A subsequent partial shutdown impacting just the Department of Homeland Security (DHS) lasted more than 3 months from February 14 through April 30, 2026. The US government is currently funded under a “continuing resolution” (CR) that expires December 11, 2026. The CR’s expiration date is notable as it is: (i) 32 days after the start of the 2027 fiscal year (most CRs are limited to one fiscal year) and (ii) long enough after the November elections for their outcome to be known. (One does not have to be too cynical to think these points are related).
With no new Congressional (or Presidential) elections for two more years, there is even less incentive for the White House and Congress to compromise on new spending legislation than there was in 2025 or earlier in 2026. We therefore consider another round (or rounds) of government shutdowns to be a very real possibility. A shutdown could come as soon as December 12, after the current CR expires, or if the Republican majority in the “lame duck” Congress wants to put the onus for the next shutdown on the incoming Democratic majority, they might enact another CR that extends government funding into early January, after the new members of Congress have been seated.
Government shutdowns have a direct and specific effect on CFIUS reviews. Pursuant to 2018 changes in the law governing CFIUS, a US government shutdown due to a lapse of appropriations automatically tolls CFIUS’s statutory timelines. As a result, both the full-government shutdown in 2025 and the DHS-only shutdown in 2026 (since DHS is a standing member of CFIUS) largely “stopped the clock” across the board at CFIUS. New filings of transactions were not accepted during the shutdowns, and CFIUS reviews of filings that had been accepted came to a standstill.
CFIUS leadership did try to minimize the effect of the shutdowns in various ways, particularly during the partial shutdown in cases not affecting DHS-specific interests. For example, even though CFIUS was not “accepting” new filings during the shutdowns, CFIUS staff continued to perform staff reviews and provide comments on draft filings. Once the parties had addressed the staff comments, CFIUS could tell the parties their filings were “complete”. If the filings were mandatory pre-closing filings, which are due at least 30 calendar days prior to closing, these “completion” messages effectively told parties they could start the 30-day waiting period and could close transactions before the CFIUS process was complete. Doing so would entail some risk, since CFIUS (once it reviewed the transaction) could impose unwanted conditions (remedies), but at least the parties would have greater optionality.
While a government shutdown does not directly impact statutory merger control timelines under the HSR Act, impact on staff may also result in practical delays in reviews by the antitrust agencies. During the 2025 shutdown, the Federal Trade Commission continued to accept and process HSR filings. While the formal waiting periods for these filings were not directly impacted, early termination of the waiting period was formally suspended even for no issue deals. Substantive reviews of pending transactions also continued with reduced staffing levels on a case-by-case basis. Practical experience showed however that parties should be prepared for longer timelines for acceptance of filings, increased risk that strategic deals raising potential issues could require a pull and refile, and delays in extended reviews where formal timelines have been suspended by a second request.
In light of the potential for a government shutdown and its effects on CFIUS and antitrust reviews, parties contemplating transactions in the coming months should prepare as follows:
Do not hesitate to contact Linklaters’ Antitrust and Foreign Investment Group and our other transaction specialists to help with these issues.
9 November 2026