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ARTICLE · 02 JUNE 2020

COVID-19: CFIUS Considerations For Distressed M&A And Lending Transactions

Cleary Gottlieb Steen & Hamilton LLP
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The COVID-19 pandemic has created market conditions ripe for increased cross border investment as businesses scramble for capital and investors target distressed assets.

United StatesCoronavirus (COVID-19)

The COVID-19 pandemic has created market conditions ripe for increased cross border investment as businesses scramble for capital and investors target distressed assets. In response, countries are using existing or new foreign direct investment (FDI) review tools to protect sensitive domestic industries and other interests. For example, the European Commission recently called upon its member states to use (or implement) FDI screening tools to protect European strategic assets1 and Australia's Foreign Investment Review Board lowered the monetary threshold for FDI review to zero, thereby subjecting all foreign investments into Australia to review by the FIRB.2

The Committee on Foreign Investment in the United States (CFIUS) is no exception. Senior Department of Defense officials have recently and repeatedly stressed the need for the active use of CFIUS reviews to protect against "adversarial capital coming into our markets for nefarious means" 3 during the current

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