EU’s Foreign Subsidies Check for M&A Deals Goes Live

The European Union’s new screening tool for third-country subsidies introduces a novel form of mergers & acquisitions scrutiny. Companies worldwide need to account for timing and execution risks arising from this system when M&A deals involve businesses with activities in the EU. The EU’s Foreign Subsidies Regulation (FSR) applies to deals agreed after 12 July 2023, and the European Commission (EC) now has the power to ex officio investigate potentially distortive subsidies granted by third countries. The FSR takes full effect on 12 October 2023, when certain M&A deals must be notified, reviewed and cleared before they can be consummated.

To learn more please see the recent client alert.