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ARTICLE · 22 JANUARY 2024

Merger Control, FDI And FSR – The Triple Impact

Herbert Smith Freehills Kramer LLP
Explore more from Herbert Smith Freehills Kramer LLP

Regulatory regimes continue to proliferate, with the EU's new foreign subsidy rules introducing a potential third regulatory hurdle...

GlobalGovernment, Public Sector
Linda Evans
Linda Evans
Kyriakos Fountoukakos
Kyriakos Fountoukakos
Joseph Falcone
Joseph Falcone
Veronica Roberts
Veronica Roberts

FSR – New kid on the block

With the entry into force of the EU Foreign Subsidies Regulation (FSR), designed to try to address the impact of subsidies granted by non-EU countries (including the UK), it will be critical for dealmakers to consider the FSR regime in the context of cross-border M&A, alongside merger control and foreign direct investment (FDI) regimes, as a new key piece of the regulatory jigsaw.

The FSR regime introduces a new mandatory suspensory notification for larger transactions – but the European Commission is able to investigate and require notifications for transactions below the thresholds (and examine any other allegedly distortive foreign subsidies under a general 'ex officio' tool). M&A transactions and joint ventures will have to be notified to the European Commission, and clearance obtained prior to completion, if:

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