In an October 29, 2026, update, the U.S. Department of Justice (DOJ) said its Antitrust Division welcomes state leadership on mergers involving “uniquely local interests,” such as when the state is a purchaser that could suffer direct injury or when potential competitive effects are limited to a single state.

Read together with a September speech by Associate Attorney General (AG) Stanley Woodward Jr. and this fall’s state-led asphalt settlements, the update signals that DOJ expects to lead on national deals but is prepared to step back on local ones, and that state AGs are ready to step in. Companies pursuing deals with local overlaps should plan for the possibility that a state, not DOJ, will investigate the deal and negotiate the remedy.

DOJ’s embrace of state leadership comes with an important caveat. DOJ appears comfortable with states taking the lead where the competitive harm is distinctly local, while simultaneously arguing for meaningful limits on states’ ability to challenge national transactions after federal review has concluded. The question, then, is not simply whether DOJ welcomes state merger enforcement but where DOJ believes state enforcement belongs, and whether state AGS will accept those boundaries.

DOJ’s Position

In the update, DOJ said principles of federalism guide it to focus its resources on mergers “with regional or national implications,” although DOJ will sometimes investigate local deals, including those that raise “an antitrust issue of national significance.” For mergers of national importance, DOJ “will generally form its own views,” though it may partner with states that “offer to contribute distinctively.” Addressing local deals, Deputy Assistant AG G. Charles Beller has said enforcers should defer to “the agency of relative competence” and the Division welcomes state leadership where “uniquely local interests” are at stake.

The update also listed the Division’s work with states since January 2026, including:

  • Partnering with the California and Tennessee AGs on consent decrees addressing local competitive harm in the cement and asphalt industries.
  • Referring asphalt investigations in New York, Pennsylvania, and New Jersey to those states’ AGs, who then reached settlements with the parties.
  • Jointly investigating local and multistate mergers with state AGs.
  • Consulting with state AGs on other local merger investigations.

The Asphalt Mergers

Although DOJ describes the New York, Pennsylvania, and New Jersey matters as “referrals,” the states have not described them as such. Rather, the states suggest that they unilaterally chose to continue investigating, and ultimately sued or settled, after DOJ closed its own reviews. That difference in characterization is notable. DOJ’s description fits comfortably within its federalism framework, under which federal enforcers identify matters where state leadership is appropriate. The states’ version suggests something different: independent sovereigns continuing their own enforcement after the federal government chose to step away. Either way, the practical lesson is the same: DOJ’s exit did not end the scrutiny.

Two transactions illustrate the point: Colas’s acquisition of Suit-Kote, which combined suppliers of asphalt emulsions and pavement preservation services in New York and Pennsylvania, and CRH’s acquisition of Arcosa, which combined hot-mix asphalt suppliers in central New Jersey. In each, the states pursued the matter after DOJ ended its review and resolved their concerns in different ways. Pennsylvania and New Jersey filed federal lawsuits that were resolved by consent orders, while New York reached an out-of-court settlement. Taken together, the resolutions required the companies to take significant actions, including divesting facilities to state-approved buyers, providing financial and equipment support to buyers, giving the states advance notice of certain future acquisitions, and, in one case, accepting the state’s right to reopen the matter and seek additional divestitures.

By contrast, DOJ and Tennessee jointly resolved CRH’s acquisition of Standard Construction through a settlement requiring the sale of two asphalt plants. In his September speech, Woodward cited the case as an example of cooperation where it “belongs:” mergers ”with a real, identifiable local footprint.”

The Federal-State Debate Behind the Update

Woodward’s September 17 speech at Fordham, titled “Antitrust Federalism,” set out the reasoning behind the update. He argued that Congress gave federal enforcers “the primary role in merger review,” citing four distinctions: (1) the U.S. sues on behalf of the national public interest without having to show injury, while states seeking injunctions under Section 16 of the Clayton Act arrive “through the private-plaintiff door”; (2) the Hart-Scott-Rodino Act gives premerger filings and pre-closing review only to DOJ and the Federal Trade Commission (FTC); (3) states seeking preliminary injunctions must post a bond, as private plaintiffs must; and (4) because a state represents only its own citizens, it is hard-pressed to show that blocking a deal serves the public interest when DOJ and other states disagree.

Woodward also criticized states that object to federal settlements or challenge deals at the last minute, calling the latter “gamesmanship” that courts should not permit, and he noted DOJ’s statement of interest on the bond requirement in California’s challenge to the Paramount Skydance transaction.

At the same time, he summarized DOJ’s approach to cooperation: “When a merger harms local markets, we want the states in the room. When it is national, we expect to lead.”

That distinction is important. DOJ’s recent statements can be read less as a broad endorsement of independent state merger enforcement than as an effort to define its proper boundaries. Under that framework, state leadership makes sense when a transaction affects a local asphalt market or when the state itself is a purchaser. But when a transaction has national implications, DOJ’s position is that federal enforcers should take the lead.

There is little reason, however, to assume that state AGs will accept that allocation of authority. Recent cases already demonstrate the point. A coalition of states led by California challenged the Paramount-Warner Bros. Discovery transaction after DOJ closed its investigation, precisely the type of national transaction on which DOJ says it expects to lead.

The disagreement extends beyond which sovereign gets to lead. In the Paramount litigation, DOJ took the position that states seeking injunctive relief under Section 16 of the Clayton Act are subject to a bond requirement. The states resisted Paramount’s request for a $1.88 billion bond, arguing that such a requirement should not effectively saddle state taxpayers with the costs the merging parties agreed to bear.

The stakes of that dispute are significant. A bond tied to the economic costs of delaying a multibillion-dollar transaction could become a substantial practical constraint on state merger challenges.

Seen in that light, the October update may be less an embrace of expanded state merger enforcement than an effort by DOJ to define a division of labor between federal and state enforcers. Whether the states agree to that division is another matter.

States Are Building Their Own Merger Review Tools

States are also building their own merger review tools. Washington and Colorado have adopted versions of the Uniform Antitrust Pre-Merger Notification Act, which requires parties filing under the Hart-Scott-Rodino (HSR) Act to send copies of their HSR filings to the state AG when they have a sufficient in-state presence. California recently enacted its own premerger notification statute, which becomes effective on January 1, 2027. California has raised penalties for antitrust violations, and is considering broader changes to its merger review standards. Because these laws require the parties themselves to provide the filings, they work around Woodward’s point that states cannot obtain HSR filings from the federal agencies without the parties’ consent. These laws give state AGs earlier visibility into deals and a stronger basis to investigate independently, regardless of whether DOJ takes the lead.

Importantly, the new premerger notification requirements do not create a second HSR-style waiting period. Their significance is informational. They put the same transaction materials that alert DOJ and the FTC to a deal directly in the hands of state enforcers at the outset of the federal review. That can allow a state AG to begin evaluating potential local effects earlier, rather than learning of the transaction later in the process.

What to Watch

The real test of DOJ’s federalism framework will not be whether states are willing to lead investigations DOJ would otherwise leave behind. It will be what happens when states disagree with DOJ about a transaction DOJ considers national in scope.

For now, DOJ appears to be drawing a relatively clear line: it welcomes state leadership where competitive effects are genuinely local, but expects federal leadership over national transactions and has questioned the procedural footing of states that seek to stop those deals after federal review. State AGs, meanwhile, are building their own merger review infrastructure and have demonstrated a willingness to continue cases after federal enforcers have stepped aside.

Those positions do not amount to a settled federal-state consensus. DOJ’s willingness to defer to a state in one matter should not be understood to mean that federal and state enforcers agree about who should lead merger enforcement or when a state should be able to challenge a transaction the federal government has allowed to proceed.

Practical Takeaways

  • Plan for state review from the start. Where competitive effects are concentrated in one state, or the state is a significant purchaser of the affected products, expect the state AG to play a central role, potentially as the lead enforcer. At the same time, DOJ has reserved the ability to investigate local transactions that raise an “antitrust issue of national significance.”
  • The end of federal review may not end the investigation. The asphalt matters show that states may keep investigating after DOJ steps away back. Parties should not assume that the expiration or termination of the HSR waiting period, or DOJ’s decision to close an investigation, means the transaction is beyond further antitrust scrutiny.
  • Check state premerger notification laws. California, Washington, and Colorado now require certain HSR filers with sufficient state contacts to submit simultaneous filings to the state AG. Parties should account for these additional disclosures in the deal timeline.
  • Don’t mistake cooperation for agreement. DOJ’s willingness to defer to states on local mergers does not mean federal and state enforcers agree about the proper scope of state merger enforcement. The dispute over the bond requirement and state challenges following federal review show that significant disagreements remain. Parties to national transactions should therefore avoid assuming that a favorable federal outcome will cause the states to stand down.

The bottom line: DOJ’s latest announcement should not be mistaken for a wholesale embrace of expanded state merger enforcement. The Division appears to welcome state leadership where DOJ believes state leadership belongs, particularly in genuinely local markets, while asserting that federal enforcers should take the lead on national transactions. State AGs may have a different view of where that line should be drawn. For merging parties, that means the end of federal review may only be the end of one review, and an effective merger strategy increasingly requires anticipating not only whether federal and state enforcers will cooperate, but where they may disagree.