Merger Suits Stall Under DOJ Boss Who Opposes Blocking Deals

A nearly $1 billion takeover by a defense supplier that Pentagon officials previously faulted for overcharging the military may serve as the latest test of how light a touch the US Justice Department is willing to take on corporate mergers. Staff at the Justice Department’s antitrust division have prepared a lawsuit challenging aerospace company TransDigm Group Inc.’s planned $960 million acquisition of Stellant Systems Inc., announced in late December, according to people familiar with the matter. Justice Department leadership, however, hasn’t signed off on a suit, said the people, who were granted anonymity to discuss a confidential situation. DOJ officials are currently in settlement talks with the companies, the people said, reflecting the Trump administration’s preference for cutting deals over suing. But upping the stakes in this case, Defense Department officials have expressed serious concerns about the deal, according to the people. The decision rests in large part on Stanley Woodward, the No. 3 official at the Justice Department who has advocated for a hands-off approach to antitrust enforcement. He has referred to merger reviews largely as a tax on dealmaking, said the people, a notable stance for the official now temporarily leading the antitrust division. The companies are two leading US manufacturers of certain radar components for the Navy and Air Force. The Defense Department is concerned that the transaction will tie the military to a sole supplier and cause prices of critical parts to surge, according to the people. The TransDigm-Stellant deal is the latest merger that the antitrust division has recommended challenging, said the people, and would require Woodward’s signoff. Woodward — a defense attorney who represented President Donald Trump’s valet in the classified documents case before he joined the DOJ — has previously rejected at least two other merger challenges, according to people familiar with those cases. The TransDigm situation is fluid and a decision on whether to sue could be made in the coming days, the people said. Spokespeople for TransDigm and Stellant didn’t respond to requests for comment. A Pentagon spokesperson said the agency doesn’t comment on active or potential mergers. “Stanley Woodward supports merger enforcement, including litigation, when appropriate,” the Justice Department said in a statement, noting that many factors are considered when deciding on enforcement actions. TransDigm is a prolific acquirer of companies. With Stellant and a previous 2024 deal, it would control much of the market for high-powered microwave tubes used in military and space operations including electronic warfare, radar and satellite communications. The company is a key sole-source provider of parts for Pentagon airplanes and helicopters and was previously found to have overcharged the military with spare parts contracts. A 2021 DOD Inspector General report said the Pentagon overpaid by at least $21 million between 2017 and 2019. The Pentagon has since said it doesn’t have the authority to recoup the money. TransDigm’s then-Chief Executive Officer Kevin Stein said at the time the IG found that “TransDigm did nothing in contravention of the federal acquisition laws and regulations with respect to its pricing.” Antitrust Skeptic Woodward oversees a vast swath of the Justice Department’s civil enforcement, including antitrust. He has taken an unusually active role in the work of the antitrust division compared to previous administrations, stifling merger litigation, according to people familiar with the matter. During Trump’s second term, the DOJ has reached settlements in several mergers, forcing companies to divest assets. In meetings about antitrust issues, Woodward has questioned why the DOJ can’t simply stop reviewing deals and suggested that blocking a merger could violate a company’s constitutionally protected due process rights, according to some of the people, who are familiar with his remarks. Under antitrust laws, the Justice Department and the Federal Trade Commission review transactions valued at more than $134 million for any indications they could hurt competition. Last month, Woodward took over day-to-day management of the division after acting antitrust chief Omeed Assefi went on parental leave with plans not to return. The White House is moving to nominate its second antitrust chief, telecommunications lawyer Adam Candeub, the general counsel at the Federal Communications Commission, Bloomberg has reported. The Trump administration’s hands-off approach to mergers stands in sharp contrast to that of the Biden administration, which challenged a number of proposed deals, drawing the ire of Wall Street and venture capitalists. Under Biden, antitrust enforcers at the Justice Department and Federal Trade Commission largely eschewed settlements in favor of lawsuits. Trump’s Justice Department has sharply reversed that trend, having sued only once – in January 2025 – to block a deal, while it reached more than a dozen merger settlements. By contrast, the FTC has sued to block three deals, winning one lawsuit, losing a second and heading to trial later this month in a third. Woodward has taken the stance that blatant violations of the antitrust laws are rare and the agency should focus on clearing mergers quickly and seeking settlements to efficiently resolve antitrust concerns, Bloomberg previously reported. There has been an exodus of senior litigators and staff from the antitrust division during the current administration. Tensions between Woodward and Gail Slater, the former assistant attorney general for antitrust, helped lead to her surprise ouster in February. Rejected Lawsuits Last month, Woodward rejected a recommendation by the antitrust division to challenge a tie-up between two leading companies offering diagnostic tools and software for car repair, Repairify Inc. and Opus IVS, according to people familiar with the matter, who also asked not to be identified discussing a confidential situation. Both companies are the product of private equity rollups in the sector. They offer tools to help diagnose and fix problems with advanced driver assistance systems – sensors and cameras that seek to help drivers avoid collisions. Antitrust division attorneys raised concerns the deal would increase costs for auto repair shops and lead to higher prices for consumers. Woodward declined to sign off on a lawsuit over fears that DOJ lawyers could be wrong about the competitive impact of the deal, the people said. Repairify and Opus closed the deal on July 2. Reparify declined to comment. And in December, Woodward rejected a bid by antitrust staff to challenge a deal between RedSail Technologies LLC and Micro Merchants Systems Inc., two of the largest companies offering software to small, independent pharmacies, according to other people familiar with the matter. Woodward allowed the transaction to close with a letter warning the companies the department could still challenge the deal, the people said. Similar letters were heavily criticized by Republican antitrust officials when issued by the FTC during the Biden Administration. RedSail closed the deal with Micro Merchant Systems in February. RedSail declined to comment. Earlier this year, the Justice Department also closed reviews of Nexstar Media Group Inc.’s acquisition of Tegna Inc. and Paramount Skydance Corp.’s acquisition of Warner Bros. Discovery Inc. without conditions. Woodward backed decisions to close the probes over objections from staff investigating the deals, the people said. The DOJ has sued to block only one merger since the beginning of the Trump administration – Hewlett-Packard Enterprise’s $14 billion takeover of Juniper Networks Inc. The agency reached a settlement days before trial, a deal Woodward was instrumental in brokering, according to court filings in the case. Two top officials who objected internally to how the pact was reached were later fired and state attorneys general challenged the settlement. A federal judge is expected to rule soon on whether to throw out or accept the settlement. Photo: Photographer: Al Drago/Bloomberg Topics Lawsuits Mergers & Acquisitions Was this article valuable? Here are more articles you may enjoy.