This Sidley memo (pg. 4) says closer national security scrutiny of deals involving foreign buyers isn’t just a U.S. phenomenon – the EU and several European nations are taking a harder look as well. This excerpt provides an overview of recent actions:
Consistent with recent trends in the United States, the European Union (EU) and many national governments in Europe are expressing renewed interest in greater scrutiny of acquisitions by foreign investors. Government ministers in Germany recently opposed a takeover in the robotics industry by a Chinese bidder, while government ministers in the Netherlands recently opposed a takeover in the pharmaceutical industry by an American bidder.
Similarly, a number of governments in Europe have recently taken steps to reform national rules in order to increase their powers to scrutinize foreign takeovers. In total, 12 of the 28 EU Member States operate regimes for the review of foreign direct investment, or FDI. The number of prohibitions has historically been low, but new rules are widening the scope for intervention.
For example, France, whose FDI regime already covers acquisitions affecting national security or concerning the supply of energy, water, transport, telecommunications and public health, is now proposing coverage of artificial intelligence and digital technology.
Other jurisdictions have opted instead to expand the scope of review by their competition authorities Germany and Austria, for example, recently introduced new thresholds into their merger control regimes which are designed to extend their jurisdiction to review acquisitions of data-rich targets in the technology and life sciences sectors.
These trends are expected to result in an increase in the overall number of deals reviewed, and are also expected to result in technology & data-related deals being subjected to both competition and national security review.
– John Jenkins