Getting a merger reviewed on national security grounds can cause
delays and even lead to failed transactions.
Canada began screening foreign takeovers on national security
grounds in 2009, and today merger planning requires careful
consideration of national security closing risks of every
transaction. The United States has also recently expanded the scope
of its national security review, and Europe recently adopted a
foreign investment review coordination framework that will apply to
all member states. The United Kingdom and Germany have also
expanded their investment review regimes with Germany recently
blocking two foreign investment transactions on national security
grounds.
On February 28, 2019, the federal government highlighted and
clarified the importance of national security reviews in the
regulatory process in its Annual Report on the
Investment Canada Act (ICA) for the fiscal year ended
March 31, 2018.
