Your Government Affairs Advisor Belongs in the Deal Room

Why regulatory strategy has to be built into an IPO, a private equity sale, or an acquisition program from the first planning meeting, not bolted on at signing.

Most companies treat government affairs as a cost center that handles problems after they arrive. A bill gets introduced, an agency opens a proceeding, a reporter calls, and the GR team is asked to manage it. That model works in ordinary times. It fails in the moments that matter most to a company's value: an initial public offering, a sale to a private equity sponsor, or a program of acquisitions meant to build scale.

In each of those moments, government is a counterparty whether or not you invited it. Federal and state regulators, congressional committees, and in some cases the White House will shape the timeline, the price, and sometimes whether the transaction happens at all. A government affairs advisor who is a true partner to the strategy team can see those hurdles coming months in advance. One kept at arm's length can only explain them after the fact.

The regulatory map is part of due diligence

Deal teams are disciplined about financial, legal, and commercial diligence. Regulatory diligence tends to be narrower, usually limited to whether a filing is required and how long it will take. A GR partner adds a different layer: a map of every government actor with a stake in the outcome, what each one is likely to want, and how those interests are trending.

For a buyer, that map answers practical questions before a letter of intent is signed. Does the target sell to agencies that must consent to a change of control? Does it hold export-controlled technology that will draw a national security review if foreign capital sits anywhere in the buyer's ownership chain? Is it in a sector where a state attorney general has been active, or where a member of Congress has made the industry a personal cause? Has the target been the subject of oversight letters, enforcement inquiries, or trade complaints that never made the news but sit in an agency file?

For a seller preparing for an IPO or a sponsor process, the exercise runs in reverse. Buyers and underwriters will ask these questions, and a company that already has the answers and a plan for each one commands a better multiple. The regulatory surprises found by the other side's diligence are the ones that cost the most.

The rules are moving, and they move fast

Consider how much has shifted in the last eighteen months. The Federal Trade Commission's expanded Hart-Scott-Rodino form took effect in February 2025. A federal district court in Texas vacated it in February 2026, the Fifth Circuit declined to stay that ruling in March, and filers reverted to the pre-2025 form while the FTC and the Department of Justice opened a request for information on what should replace it. The reporting threshold moved to $133.9 million for 2026. In July 2026 the FTC collected $12 million in penalties from Edwards Lifesciences and Genesis MedTech for a deal the agency said was structured to stay under the threshold, the largest such penalty on record. A deal team that set its filing strategy in 2024 was working from rules that no longer exist.

The states have entered merger review on their own terms. Washington and Colorado premerger notification laws took effect in July and August 2025, requiring parties above certain in-state sales thresholds to file copies of their HSR materials with the state attorney general, with penalties of $10,000 per day. California followed with a law effective January 1, 2027, carrying penalties of up to $25,000 per day, and several other states have introduced similar bills. Each of those statutes moved through a state legislature, where government affairs professionals watched them long before deal lawyers were drafting compliance memos.

National security review has grown as well. The Committee on Foreign Investment in the United States reviewed 347 covered transactions in 2025, up from 325 the year before, and asked for full notices on roughly a quarter of the short-form declarations it received. The Nippon Steel acquisition of U.S. Steel showed what happens when a deal becomes a political question: blocked by one president in January 2025, re-reviewed on the order of the next, and closed in June 2025 only after the company agreed to a national security agreement, roughly $11 billion in committed investment, and a golden share giving the United States government consent rights over major corporate decisions. No filing predicted that outcome. Political judgment did.

Public companies inherit a permanent regulatory audience

An IPO does not end regulatory exposure. It multiplies it. A public company's risk factors, supply chain, customer concentration, and international footprint become documents that congressional staff, agency lawyers, and activist groups read closely. Trade policy, export controls, and tariff decisions that once affected a private company quietly now move a stock price and invite shareholder questions. Nasdaq's rule requiring China-based issuers to raise at least $25 million in a firm commitment offering, approved by the SEC in May 2026, is one recent example of listing standards tracking geopolitics. A company heading to the public markets needs a GR partner who can help it write disclosure that is accurate without being alarming, and who builds relationships in Washington and in state capitals before the company needs to draw on them.

What partnership actually looks like

Making government affairs a partner to strategy means three things in practice. First, GR sits in on pipeline reviews and hears about potential targets and buyers at the same time as the corporate development team, under the same confidentiality obligations. Second, GR delivers a written regulatory and political assessment as a standing part of the diligence package, alongside the quality of earnings report and the legal memo. Third, GR owns the plan for the approval period: which officials need to hear from the company directly, what state and local stakeholders will be told, how employees and community groups will be engaged, and what happens if a member of Congress or a governor takes an interest.

The bottom line

Every strategy leader should open a deal analysis with one question: what portion of this transaction's value is exposed to regulatory approvals or to the caprice of government? Put a number on it. In my experience, for a typical deal the honest answer is north of 30 percent once you account for timing risk, conditions on approval, political attention, and the rules that will change between signing and closing. No board would accept a model that left a third of the value unexamined on any other line item. Regulatory and political exposure deserves the same treatment, as a mandatory part of every analysis rather than a footnote.

Companies that operate this way spend about the same on government affairs as companies that do not. The difference is what they get for it. A reactive GR function produces explanations. A strategic one produces options, and in a transaction, options are worth real money. If your company plans to buy, sell, or go public in the next few years, the time to bring your government affairs advisor into the room is now.