What are the legal FDI implications of COVID-19 in Europe and the U.S.?

What are the legal FDI implications of COVID-19 in Europe and the U.S.?

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COVID-19 has not only significantly slowed down social life, but economies as well. All over the world, competition authorities have felt the need to temporarily adjust their regulations and tighten their scrutiny. They have to balance between protecting the nation’s economy and stimulating recovery, while still allowing for collaboration and cross-border trade and investments. The Foreign Direct Investment regulations in Europe are seeing exemptions in certain forms of cooperation, allowing state aids under certain conditions, but also increased restrictions in acquisitions to avoid ailing firms to fall into foreign hands.

In the U.S., COVID-19 has affected and will continue to affect examinations of foreign investment into the United States by the Committee on Foreign Investment in the United States (CFIUS). In particular, the pandemic may lead to additional scrutiny of foreign investments in the U.S. health, biotech and pharmaceutical sectors. In addition, debt restructuring transactions and opportunities to invest in distressed assets will probably be on the rise. Both foreign investors and lenders should assess if these transactions may be within the jurisdiction of CFIUS and, if so, whether a filing must or should be made.

Our panel will discuss:

  • Overview of the various rules related to FDI [EU] and CFIUS [U.S.]
  • Recent COVID-19 related changes
    • Expanding the list of relevant sectors
    • Including acquisitions in sectors other than Defense and Security (EU)
    • Expanding the list of notifiable transactions
  • Interactions with EU Regulation on FDI

● Francesco Maria Salerno, Partner, GIANNI, ORIGONI, GRIPPO, CAPPELLI & PARTNERS
● Jeanine McGuinness, Partner, ORRICK
● Jonathan Shames, Global Client Service Partner, PE & Geostrategic Business Group, EY [Moderator]

EACC Member: Free
EACC Non-member: Free