economic nationalism

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By Richard Butterwick, Jonathan Parker, Jana Dammann and Katie Campbell

Growing economic nationalism is threatening to impact M&A across Europe, as governments and regulators take an increasing interest in “foreign” acquisitions of nationally important companies. Deal teams have previously focused on established national security review regimes, including the Committee on Foreign Investment in the US (CFIUS) and the Foreign Investment Review Board in Australia. Now legislative changes in Germany, proposed changes and heightened government interest in the UK and recent statements from the European Commission (EC) indicate a more interventionist approach to acquisitions.

Germany Increases Powers to Scrutinise and Block Sensitive Deals

Recently implemented changes to the German Foreign Trade and Payments Ordinance (FTPO) regime allow the German government to scrutinise and block direct and indirect acquisitions by non-EU bidders of German companies active in security-sensitive areas. The affected industry sectors subject to potential review are broad and include energy, water, nutrition, information technology, healthcare, financial services and insurance, transport and traffic, and software. The changes will affect German inbound deals, which we anticipate will be subject to a greater number of investigations and a stricter approach from the regulator.

By Jonathan Parker, Jana Dammann and Doug Abernethy

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Growing economic nationalism is threatening to impact M&A across Europe, as governments and regulators take an increasing interest in “foreign” acquisitions of nationally important companies in the name of national security. PE deal teams have previously focused on existing national security review regimes, including the Committee on Foreign Investment in the US (CFIUS) and ministerial clearance under the French Monetary and Financial Code. Now legislative changes in Germany, proposed changes and heightened government interest in the UK, and recent statements from the European Commission (EC), indicate a more interventionist approach to acquisitions.