Aerospace and Defense Insights | Regulation of foreign direct investment on the rise in Europe

Mergers and acquisitions in the aerospace and defense industries, like many other industries, have slowed due to the impact of the COVID-19 pandemic and related economic downturn. But the effect of the downturn is not uniform across this diverse industry and it has not halted all mergers and acquisitions. To the extent transactions continue, acquirers and sellers should anticipate increased regulation of foreign investments by the EU and EU member states. Foreign investment control screenings have become an important consideration when structuring deals and planning for regulatory review. We expect future deals in the industry to be shaped by enhanced foreign investment regulations. New and enhanced foreign investment regimes have already been adopted by a growing number of jurisdictions and we are already seeing this reflected in our deal practice. A review of recent developments in the EU and in EU member states follows.

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Authored Dr. Falk Schöning and Stefan Kirwitzke.