Cross-border M&A

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The Committee on Foreign Investment in the United States (CFIUS) recently released its 2019 annual report, which provides information and statistics regarding transactions reviewed by CFIUS during 2019.  CFIUS released its 2018 annual report (as well as summary data for transactions reviewed in 2019) last month, which we wrote about here.  The 2019 annual report confirms and expands on the more limited 2019 data released last month.

Key takeaways include: (i) the number of CFIUS notices has remained relatively consistent over the past three years; (ii) the percentage of notices that proceeded to a second-stage investigation decreased significantly from 69% in 2018 to 48.9% in 2019; (iii) the percentage of notices withdrawn and refiled decreased from 18.6% and 18.3% in 2017 and 2018, respectively, to 7.8% in 2019; and (iv) only 4.3% of transactions reviewed by CFIUS during 2019 were abandoned as a result of CFIUS issues, compared to 10.5% and 8.7% in 2017 and 2018, respectively.
Continue Reading CFIUS Releases 2019 Annual Report

Over the last few weeks, there has been a flurry of activity at the Committee on Foreign Investment in the United States (CFIUS).  In addition to imposing filing fees, which we wrote about here, and issuing proposed amendments to broaden the mandatory CFIUS notification requirements, which we wrote about here, CFIUS recently blocked a robotics joint venture in China with no U.S. assets and limited to operations outside the United States, released detailed information regarding the transactions reviewed by CFIUS during 2018 (as well as summary data for transactions reviewed in 2019), and announced a new electronic filing system.
Continue Reading CFIUS Blocks Joint Venture Outside the United States, Releases 2018-2019 Data, and Goes Electronic

On May 21, 2020, the U.S. Department of the Treasury published a proposed rule (the “Proposed Rule”) that would significantly broaden the scope of mandatory filing requirements of the Committee on Foreign Investment in the United States (“CFIUS”) for foreign investments involving U.S. critical technology businesses.

The Proposed Rule abandons the current restriction to specified…

The COVID-19 pandemic has created market conditions ripe for increased cross border investment as businesses scramble for capital and investors target distressed assets.  The Committee on Foreign Investment in the United States (CFIUS) is focused on the trend.  Senior Department of Defense officials have recently and repeatedly stressed the need for the active…

In a March 25, 2020 communication, the European Commission (“EC”) issued guidance on the screening of foreign direct investments (“FDI”) in the context of the COVID-19 pandemic. The communication identifies an increased risk of attempts by non-EU acquirers to obtain control over suppliers of essential products, in particular healthcare sector products. The EC calls on Member States to make use of pre-existing FDI regimes, and to introduce robust screening mechanisms where they do not already exist, to protect “critical health infrastructure, supply of critical inputs, and other critical sectors.”  The communication builds on the increasing coordination among Member States that was already encouraged by the EU FDI Screening Regulation that comes into effect in October 2020.
Continue Reading European Commission Urges Member States to Protect Suppliers of Essential Products from Foreign Takeovers

With a draft bill to amend the Foreign Trade and Payments Act (Außenwirtschaftsgesetz – AWG) issued on January 30, 2020, the German Federal Ministry of Economics and Energy (Bundesministerium für Wirtschaft und Energie – BMWi) has started a legislative process to change the German foreign direct investment control regime (FDI Regime). This will be the third amendment to the FDI Regime since 2017. While the German Government continues to emphasize that Germany maintains an investment-friendly environment, these changes will further strengthen the Government’s ability to scrutinize foreign direct investments in Germany. As with earlier amendments to the FDI Regime, which all aimed to protect German and European security interests, these new changes will have a significant impact on M&A transactions in Germany.
Continue Reading Upcoming Changes to the German Foreign Direct Investment Control Regime