DealLawyers.com Blog

This recent FTI Consulting article highlights the increasing role that geopolitics and national security considerations play in the dealmaking process and how they are shaping deal strategy. The article highlights several areas of geopolitical risk that should be on dealmakers’ radar when doing deals in EU member jurisdictions, including the implications of receiving foreign subsidies, increasingly stringent foreign direct investment regulation, and industrial policy pressure.

This excerpt offers tips on how buyers should integrate these policy considerations into their strategy and decision making to position themselves to withstand this regulatory scrutiny:

– Redesign your processes by embedding antitrust early in the strategy development, whether planning for an M&A or launching a new product, while assessing geopolitical risk alongside financial and strategic due diligence.

– Build geopolitical intelligence into your regulatory strategy by understanding and anticipating how the broader geopolitical environment may affect the perception of competition authorities and policymakers.

– Engage proactively, not reactively position your transaction and constructively help the relevant authorities to support informed decision-making and mitigate the risk of negative politicisation of deals.

– Plan for different scenarios early in the process, incorporating legal and geopolitical dimensions before formal filings and anticipating concerns that could become formal objections.

– Have a dynamic strategy, that allows for adaptions due to changes in the political environment or legal discussions which could affect the perception of the transaction and the regulatory approvals.

– John Jenkins