2023 review
Increased regulation
Regulatory approvals needed for deals increased in 2023.
Foreign direct investment (FDI) controls
Countries continued to adopt or improve FDI control regimes, driven by a desire to protect national security and supply chain fears. The increase in FDI regimes is a significant change over only the last few years. As a consequence, there has been a rising number of deals blocked or conditioned.
New FDI regimes were established in Belgium, the Netherlands, Luxembourg and Sweden in 2023. All 27 EU Member States and the UK either have an FDI regime or are currently adopting one.
The French regime was extended to include the extraction and processing of critical raw materials. The Belgian regime is wide in scope, but little guidance on application was provided which caused uncertainty for deals last year.
A new law was introduced in Spain to clarify its FDI regime to improve the initial deal analysis process and the UK government announced a review of its relatively new FDI regime, which may result in new exemptions such as for group reorganisations and the clarification of in-scope sectors.
EU Foreign Subsidies Regulation
Larger M&A transactions and joint ventures which have an EU nexus came into the scope of the EU Foreign Subsidies Regulation from July 2023.
The regulation requires notification of, and imposes obligations in relation to, certain "foreign financial contributions" (which is defined widely) made to the acquirer and the target by non-EU countries.
The regulation is intended to ensure that subsidised companies do not benefit from an unfair advantage when participating in transactions. Transacting companies affected by the regulation may need to repay the subsidy or offer other remedies to obtain clearance before closing their deal.
Merger control
The European Commission simplified its merger control regime, but both the EU and UK competition authorities were active in merger enforcement, aggressively reviewing certain acquisitions in 2023.
Other regulatory authorities
Across Europe we have seen wider increased regulatory enforcement, including in the life sciences and healthcare sector.
