DealLawyers.com Blog

As this Cleary blog indicates, the European Commission recently published its report documenting the results of its first review of the Foreign Subsidies Regulation (FSR) for its first three years, and the EC Staff also published a Working Document detailing the feedback received on the FSR Guidelines published in January and how that feedback was taken into account. The EC’s FSR introduced a new and supplemental merger review regime requiring approval for transactions involving companies that have received financial support from non-EU governments. Here are some stats from the report highlighted by the Cleary team:

The FSR has caught far more transactions than anticipated (averaging 100 per year) while the intervention rate is extremely low: 99% of mergers were cleared without an in-depth review.

In 20% of these cases, the filings did not report any foreign financial contributions (FFCs) as these all fell within the reporting exemptions.

Given this data, the blog says:

In response, the Commission will propose targeted changes to streamline the regime. These include higher notification thresholds for merger filings and a simpler filing form for public tenders. The Commission will publish its detailed proposals in the fall and intends to adopt them in 2027.

The Commission is considering changes that would (a) reduce the overall number of notifications and (b) further streamline filing requirements. These include:

– Raising the turnover notification threshold, reportedly to €600 million;[3]

– Introducing a simplified process for low-risk mergers or FFCs;

– Increasing the thresholds for reportable FFCs in the merger filing (currently €1 million for individual FFCs and €45 million by country); and

– Introducing new exemptions for reportable FFCs in the filing.

For more background on the FSR regime, see these Mayer Brown FAQs.

– Meredith Ervine