Merger control and national security: key considerations for corporate transactions

February 2025  |  TALKINGPOINT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

February 2025 Issue

FW discusses key merger control and national security considerations for corporate transactions with Lisa Navarro, Stuart Bedford, Gerrit Rixen, Helen Roxburgh and Annalie Grogan at KPMG.

FW: Reflecting on the last 12-18 months, what do you consider to be the key trends shaping merger control? How have perceived national security threats impacted this space?

Navarro: National competition authorities (NCAs) have shown an increased willingness to challenge transactions and consider non-traditional theories of harm, including the impact of deals on innovation. Other areas of focus include labour market effects, such as incentives to recruit, and the concept of dynamic competition, including assessing acquisitions of nascent players in adjacent markets. One trend for deals subject to parallel reviews has been a lack of consistency in the degree of scrutiny, the issues raised, remedies considered and the outcomes reached. High-profile deals have highlighted a potential divergence in approach by the European Union (EU) and the UK post-Brexit, and abandoned deals have cited the ongoing scrutiny in multiple jurisdictions with no clear path to clearance. The introduction of targeted competition regimes for digital markets, including mandatory notifications of all deals involving the larger players – from March 2024 in the EU and January 2025 in the UK – will also drive increased activity.

Grogan: From a national security perspective, we have seen jurisdictions continue to develop their foreign direct investment (FDI) frameworks and to exercise those powers to address concerns around national security. New legislation has been introduced, in Ireland for example, to plug perceived gaps, and the UK’s Investment Security Unit (ISU) has been proactive in engaging with advisers and other stakeholders to test the effectiveness of the regime. Looking at the UK, the number of transactions notified under the National Security and Investment Act (NSIA) has remained consistently high, with on average 712 mandatory notifications in each of the last two years. However, the number of deals subject to a detailed review, or resulting in a final order, is relatively low. That said, the ISU has intervened to prohibit transactions and to impose behavioural conditions where it has identified national security concerns.

Bedford: One of the biggest changes of the last 18 months has been the introduction of the Foreign Subsidies Regulation (FSR). Transactions with a large EU dimension must make mandatory suspensory notifications disclosing details of subsidies received from third countries – and monitoring a much broader set of financial contributions to inform those disclosures. For parties that engage in big ticket M&A, this has added another regulatory hurdle that can impact deal timings and increased the data burden to be able to test jurisdictional thresholds and complete notifications in a timely manner. The FSR has particularly impacted private equity (PE), given the complex structures, multiple data points and possible involvement of state-related investors. PE has also been affected by evolutions in merger control rules too, such as the new Hart-Scott-Rodino (HSR) rules which expand requirements for disclosing minority shareholders, investment funds, and entities holding indirect stakes in an acquirer or target.

Rixen: Merger control has a significant impact on transactions, in particular regarding costs, timing and deal security. To assist with deal certainty, most merger control regimes have clear definitions of the type of transactions that fall in scope and the jurisdictional turnover thresholds that trigger filings. That has created a perceived enforcement gap for acquisitions of low turnover but high innovation value targets – colloquially called ‘killer acquisitions’ – or for other novel investment models such as ‘acquihires’, which are increasingly common in the digital sector. In the EU, this has played out through the increasing use of article 22 referral powers, leading to at least two transactions being abandoned. Some certainty has been returned by the European Court of Justice (ECJ) decision on 3 September 2024 regarding Illumina/Grail which confirmed that member states cannot refer a transaction to the European Commission (EC) where they have no jurisdiction to review it under their national rules.

Roxburgh: In the UK M&A mid-market, we see a continued trend toward both an increasing globalisation of the operations of companies being sold, and interest from overseas acquirers in UK-headquartered businesses. Merger controls, including the ever-increasing national security focused regulatory controls, have become an increasing factor in M&A across the size brackets. This is no longer something just relevant to large-cap M&A. In the UK, there has been much discussion around the type of remedies that the Competition and Markets Authority (CMA) will entertain. Traditionally, antitrust authorities have favoured structural remedies, but as markets evolve, so too have the calls for behavioural and more innovative remedies grown. This has caused some divergence for multinational deals subject to parallel reviews, with the differing approaches of the EU and UK to Microsoft/Activision exemplifying that. However, with its decision to clear Vodafone/Three, the CMA has signalled an intent to properly engage with non-structural remedies.

FW: To what extent are governments around the world expanding their merger control rules and empowering competition authorities to intervene in pending deals?

Navarro: There are over 130 merger control regimes in force globally that continually test and strengthen their powers. These authorities are willing to prohibit transactions where significant concerns are identified, and the market perception is one of increased risk of investigation and review, and stronger likelihood of challenge. This is the case for key jurisdictions which set enforcement trends, such as the UK, EU and US. At the same time, the willingness to use non-traditional routes to scrutinise deals not caught by the usual jurisdictional thresholds increases legal uncertainty. Combined with challenging market conditions, there is a risk that the regulatory environment could contribute to a chilling effect on deal activity. That said, even before the ECJ drew a line under the apparent expansion of the article 22 referrals, the EC had only accepted two article 22 referrals, so the feared floodgates had not opened.

Rixen: The ECJ’s decision has prompted EU member states to revisit national regimes to enable referral of deals that might otherwise escape scrutiny. Eight EU member states introduced new or expanded call-in powers – with such deals then eligible for referral to the EC. The statutory requirements differ, but typically utilise vague criterion of competition concerns, sometimes combined with turnover or other thresholds. The ECJ’s 2023 decision in Towercast confirmed another route, with NCAs entitled to find that a merger without an EU dimension, below national thresholds and with no article 22 referral, can still constitute an abuse of a dominant position under article 102. In Germany, undertakings with activities in economic sectors which have been subject to a sector inquiry can be obliged to file even small transactions if there are indications of competition concerns, and for a period of time up to 12 years.

Grogan: The probing of minority investments, especially into artificial intelligence (AI) and digital businesses, is another demonstration of attempts by NCAs to expand their enforcement remit. Deals such as Microsoft and OpenAI have tested the boundaries of the NCAs’ traditional jurisdiction, but despite scrutiny from the EU, the CMA, the Federal Trade Commission (FTC), the Department of Justice, the French Competition Authority and the German Bundeskartellamt – none of them found a basis for reviewing under the merger control rules. The Digital Markets, Competition and Consumer Act changes to merger control came into force on 1 January 2025 and introduce a new test to support reviews of killer acquisitions and non-horizontal transactions, as well as mandatory notifications for transactions involving companies with designated ‘strategic market status’ in digital sectors. Separately, the FTC required five of the players likely to be subject to these designations to provide information about recent investments and partnerships involving generative AI companies and major cloud service providers.

Bedford: From a sector perspective, the introduction of new regimes targeted at digital markets with specially designed powers that enable greater scrutiny of transactions, is a key expansion of merger control. The inherent globalism of online businesses that create ecosystems and infrastructure that plays a key role in how customers buy, and how businesses reach those customers, means that having just one merger regime take a hardline approach to M&A activity may have an inevitable knock-on effect in other jurisdictions. Carving out businesses or assets to get a deal through might be feasible in analogue worlds but may be more challenging in the online environment.

Roxburgh: From a deal perspective, understanding the areas of focus for NCAs and how they are exercising those powers is useful, but is just one of many factors that influences decisions around which M&A opportunities to pursue, and when to progress them. Ultimately, if a transaction does not present any anti-competitive effects, then the need to go through a regulatory clearance process is just another step in the deal process. For instance, while the UK’s CMA has been noted for taking an interventionist approach, at the same time the positive use of the briefing paper route to provide early comfort to merging parties in non-problematic transactions represents a proportionate and sensible approach. Similarly, the strong adherence by the ISU to completing its phase 1 reviews within the 30 working day statutory period has helped reassure acquirers that the impact on deal timelines is inherently manageable.

FW: For acquirers evaluating a potential target, what merger control and national security issues should be considered? How might these issues affect the viability of a transaction?

Navarro: Merger control and national security regimes both drive regulatory scrutiny of transactions, but from different perspectives. Merger control is focused on the impact of the merged entity on competition in relevant markets, considering not just horizontal overlaps, such as combinations of competing businesses, but also effects on vertical relationships where there is consolidation within a supply chain. FDI regimes focus primarily on national security considerations, with mandatory and often suspensory notifications required when targets are active in sensitive sectors, such as the production of dual use goods or involvement in critical national infrastructure. Understanding the risks requires advisers to get under the bonnet of the business and combine sector awareness with experience in regulatory frameworks.

Rixen: Reviews can have a significant impact on the viability of transactions. If no filing requirements are triggered and the risk of the deal being called in for review is low, the transaction can proceed swiftly. If notifications are required for technical reasons, such as turnover thresholds, but there are no substantive issues, such as no competitive overlap, then the timing of the review process and gun jumping risks must be factored in, but these can be easily managed. Comparatively, where a deal raises competition or national security concerns, this will require more upfront work to position the issues with the authorities and to support an approval decision. In some cases, it may also necessitate early evaluation of possible remedies so these can be presented to the authorities as early as possible for discussion. This is particularly important if a carve out or restructuring is required.

Grogan: On the national security side, as the statistics on conditional approvals and prohibitions demonstrate, authorities appear most concerned with acquisitions by entities with links to foreign states, with many in-depth reviews arising for acquirers with Chinese or Russian connections. The US secretary of state’s decision to prohibit the acquisition of Upp by LetterOne – an entity whose founders included Russian individuals subject to sanctions – cited concerns about “the ultimate beneficial owners’ vulnerability to leverage by the Russian state” and connected this to characteristics of the broadband sector in which Upp is active. The judicial review of that decision confirmed the level of discretion afforded to the government when determining matters of national security, noting that it involves “matters of judgment and policy which the court is not equipped to decide”.

Roxburgh: While it is unusual for merger control, and to a lesser extent national security issues, to prevent a transaction happening at all, an acquirer may need to consider its appetite to acquire if there is likely to be a remedy in relation to certain aspects of the business post completion of the transaction. While this may impact the overall attractiveness of the target, for some transactions this may be considered simply the price to be paid to secure a rarely available asset. For others, the process or value implications of being unable to immediately integrate, and a subsequent disposal of part of the business in compliance with merger control requirements, may mean that an acquirer moves on to an alternative opportunity.

Bedford: The overlap, or lack thereof, between merger control and FDI regimes also needs to be taken into account. The increase in FDI regimes means that deals that do not trigger merger control scrutiny may still be subject to regulation and intervention.

FW: What initial steps should acquirers take at the outset of a transaction to identify potential merger control and national security clearance requirements? How important is an early regulatory assessment toward establishing notification thresholds and the risk of overlapping reviews?

Roxburgh: Taking the right advice at an early stage of considering a transaction is critical for an acquirer. Put simply, this can go to the heart of the deal rationale and whether to incur the costs of considering an acquisition – and potentially turning off other opportunities – or not. By doing the analysis early, parties will understand the risks and can make informed decisions about whether to proceed, regarding all the regulatory implications. In addition, demonstrating to a vendor that all relevant matters have been considered, and a plan put in place to deal with any issues arising – or, even better, that there are no issues – can position a potential acquirer ahead of others in a competitive M&A process. For vendors, ranking bids by reference to the regulatory implications, as well as financial and other commercial considerations, can be key in deciding which bids to progress and, ultimately, accept.

Rixen: Clearance requirements should be identified as early as possible, ideally before or during the due diligence phase. The initial testing of jurisdictional thresholds typically requires access to granular breakdowns of turnover and asset data for merger control, and the activities of the target for FDI. Some jurisdictions also require consideration of market shares, which means getting into the relevant market and competitive overlaps at an early stage. As this information may be commercially sensitive and subject to competition law restrictions on information exchange, the process is typically undertaken by external legal counsel who share the necessary data and report the outcomes in an aggregated form to parties. Where notifications have been identified, then adequate time must also be allowed to conduct the in-depth substantive analysis and gather the information and factual and economic evidence that will be required to present a compelling case to authorities.

Bedford: For the lawyers drafting the deal documentation, early identification of clearance requirements is central to identifying the need for conditionality. That allows the detail of the condition, including provisions for cooperation in the preparation of filings and conduct of reviews, to be agreed at a sensible point in the overall timeframe. It also enables the teams preparing the notifications to begin work in parallel with the corporate negotiations. In turn, this allows the greatest flexibility when substantive concerns do arise to being timely pre-notification engagement with competition authorities. And in worst-case scenarios where remedies might be required, that can be considered in the deal reached between the parties – including the allocation of risk and price.

Navarro: Given the potential for merger control or FDI issues to impact the viability, timing and structure of a transaction, early regulatory assessment is essential. If notifications are triggered in multiple jurisdictions, parties will face overlapping reviews undertaken in parallel. These may be subject to different timelines, and the conditionality, including any longstop dates, must account for all potential variations. Where a deal triggers multiple notifications across EU member states, parties can also consider an article 22 referral of the transaction to the EC to take advantage of the one-stop shop review. The sooner parties appreciate that their transaction will be subject to scrutiny, the easier it is to implement sensible controls around the permissibility of actions taken and information exchanged before clearance and closing. This may include establishing clean teams for sharing competitively sensitive information and implementing procedures to minimise gun jumping risks.

Grogan: Early reviews also provide adequate time to make sure that all potential regulatory clearances have been considered, bearing in mind that thresholds periodically change and new regimes, like the FSR, may have been introduced since the last time the parties did a deal. While the FSR catches a comparatively small percentage of deals given the jurisdictional thresholds, where it is in play the volume of data that may be required to assess if a notification is triggered, and then to complete the necessary forms, should not be underestimated.

FW: In what ways can national security regulations affect the structure and timing of cross-border deals?

Navarro: In the world of merger control there is a degree of uniformity around jurisdictional thresholds and the concept of competition concerns. This is particularly true in the EU through the one-stop shop approach. FDI regimes, in contrast, are driven by national perceptions of security concerns. This is the case even in the EU, where local law is derived from the centralised FDI Regulation. While there are some common themes, such as critical infrastructure and support for the defence sector, there are distinct national nuances that need to be reflected in reviews. This can impact the sectors in scope, both how they are defined and key concepts interpreted, but also the type of transactions that are caught. Many regimes require the target to have a local presence but others, like the UK, catch entities that simply carry on business in the country. Similarly, not all require the acquirer to actually be ‘foreign’.

Rixen: Many FDI regimes impose mandatory suspensory notification obligations, clearly impacting on the timeframe for closing deals. Timeframes are often broadly similar to merger control, but the breadth of the triggers and lack of materiality thresholds may catch a deal that would not be subject to merger control scrutiny. Where an in-depth review is required, the duration will depend on the complexity of the case. In some cases, national security obstacles can be managed by altering the structure of cross-border deals. For example, if there is an issue with a particular target entity, it might be feasible to carve that out to allow the remainder of the deal to close. Unlike merger control, however, structural remedies often do not work for mitigating national security concerns. This is because the issue is more likely to arise from the activity of the target, rather than its size. Behavioural remedies that restrict voting rights or ringfence sensitive information often prove feasible.

Grogan: The recent judicial review of an NSIA prohibition decision shone a light on the ISU’s process for in-depth assessments of national security concerns. Previously somewhat opaque, it is now understood that the ISU compiles an ‘investment security risk assessment’, including diplomatic and economic considerations, a remedies assessment, which considers the cost, effectiveness and impact of potential remedies, and a representations assessment, which reflects the views of affected parties. These are presented along with the ISU’s recommendation to the chancellor of the Duchy of Lancaster who takes the final decision. Previously accepted remedies have included restrictions on voting rights, ringfencing of knowledge and information, and imposing obligations to keep industrial capabilities within the UK. However, where prohibition is a proportionate response to the nature of the risks identified or anticipated in future years, the ISU has been happy to block deals.

Roxburgh: The regulatory position for cross-border deals can be complex and working through the potential implications and process for clearance can be involved. While there are often several similarities between different regimes, there can be nuanced differences which need early identification and consideration. When advising a vendor on a potential transaction, understanding the regulatory implications, likelihood of clearance and associated timescales is critical. In a competitive process, this can often be a key factor in deciding which party to progress with. In addition, understanding potential timescales for clearance can be important when navigating the period between exchange and completion, particularly in relation to legal conditionality and financial factors including completion mechanisms. There may, for example, be more flexibility about the timing of an FDI notification that will allow the review process to commence when the deal is sufficiently certain, but before any sales and purchase agreements have been signed.

Bedford: Many cross-border deals may be preceded by internal reorganisations to prepare the business for sale. Several FDI regimes, such as the UK and Sweden, bring these reorganisations within the scope of mandatory notifications if the triggers are satisfied, even though there is no change in ultimate ownership. The teams that typically run these processes are often distinct from the M&A advisers, so may not be as familiar with the need to factor in regulatory clearances. If that realisation comes late in the day, the impact on timing of any subsequent sale can be problematic. Equally, if a sale is notified and the preceding reorganisation should have been, but was not, this can create issues for the notifying acquirer. FDI reviews should be a standard part of the due diligence steps for these internal reshuffles.

FW: What best practices should acquirers adopt to help manage merger control and national security filings, to maximise the chances of receiving clearance and reducing transaction delays?

Grogan: Potential filing requirements should be identified as early as possible, ideally before or during the due diligence phase. This is essential to streamline and optimise the process of drafting, aligning and filing the necessary notifications. Importantly, it also allows deal terms to be adapted to adequately reflect statutory timelines with some flexibility built in. For example, the UK’s NSIA review has a statutory 30 working day timeline, but with the clock not starting until the notification is accepted as complete, it is good practice to allow extra time between submission and acceptance. Where multiple clearances are required and different NCAs will review the transaction in parallel, it is crucial to ensure consistency across submissions. The cooperation frameworks in place mean that merging parties must presume that NCAs will share information and views about deals. At the same time, allowing for the nuances of local law requirements is also important.

Rixen: Equally important is a substantive evaluation to identify possible obstacles, such as competition or national security concerns. Early identification gives parties more time to engage with economists and identify solutions without jeopardising the transaction timeline – or its overall viability. Early consideration of substantive risks is commonplace for EU and UK notifications but traditionally less so in the US. The anticipated shift in HSR rules will bring greater alignment in that regard. Some NCAs require extensive pre-notification engagement to ensure sufficient information is available when the statutory review commences. Better preparation at an early stage also means that pre-notification engagement with NCAs to discuss and pre-solve obstacles should be less time consuming. Equally, where issues can be addressed through altering the transaction structure, early identification makes it a feasible option. Identification of potential remedies at an early stage can also optimise the time available for evaluations, development of evidence and negotiations.

Navarro: Companies can put themselves in the best possible position to conduct this analysis in a timely manner by maintaining the information needed to assess jurisdictional thresholds and triggers – or at least knowing where it is held so it can be accessed at pace. Businesses that are particularly acquisitive – especially PE firms – will periodically collate turnover and asset information to run merger filing assessments. The proliferation of FDI regimes has meant that having a handle on touchpoints into sectors that have particular national security sensitivities can be important too. Similarly, the FSR has introduced the need for dynamic tracking of financial contributions alongside auditable trails of classification and analysis and underlying rationales. While these data requirements have historically been managed through spreadsheets, there are increasingly tech-enabled options available to take some of the pain and cost out of the data management tasks.

Roxburgh: The key point here is to ensure that the right advice is taken at an early stage on the regulations relevant to the particular transaction. Not only does this mean that consultation with regulators can happen early, and submissions are more likely to be accurate and complete when first submitted – all of which increases the chance of receiving clearance quickly – but it also has the added benefit of positioning an acquirer in the best possible light to a vendor, which is particularly important when an M&A process is competitive. Another material issue can be the impact of disclosures required by NCAs and what they reveal about internal corporate views on the impacted markets and deal rationale. The range of documents requested has been increasing in recent years, and the proposed new US rules will bring in even more categories as well as requiring mandatory verbatim translations of all disclosed documents into English.

Bedford: Ensuring deal teams and corporates understand this dynamic early gives them greater opportunity to build in the appropriate internal guidelines to inform document creation and content. These are best practice measures both before the deal and during the review period. Similarly, being prepared to promptly respond to any requests for information issued during the merger control or national security review can help minimise the impact on the overall timeline.

FW: How important is it to set realistic expectations with stakeholders regarding the potential impact of regulatory reviews on deal timelines and overall transaction viability? How should deal parties approach this aspect of a merger or acquisition?

Roxburgh: The potential impact of regulatory reviews can be material. It is important that vendors take legal advice at an early stage given the potential impact on matters, such as information provision to certain potential acquirers. Ultimately, where a deal will be subject to scrutiny and there is any uncertainty about the outcome, parties must enter the process understanding the risks and being prepared to see it through. It is also something potential acquirers should cover when providing an indicative offer for the target. Not only can this be a relevant factor in identifying deal risk and conditionality, but it can also be a useful guide to those acquirers that are taking a potential acquisition seriously, and are willing to run hard at an early stage in order to best position themselves to be the selected acquirer.

Rixen: Setting realistic expectations regarding the potential impact of regulatory reviews on deal timelines and overall transaction viability is a key success factor for the whole transaction process. Timing impacts of filing procedures, including their preparations, can be very different. Two to four months may be sufficient in most cases, but the entire process can take up to a year or longer in exceptional cases. This fact alone might jeopardise a transaction timeline and longstop dates if not detected early enough – and has led to deals being abandoned. Even more relevant are obstacles that might require an alteration of the transaction structure or behavioural commitments. Again, time is essential. Evaluations should be conducted early to leave enough time for reliable evidence and input to be considered. Any variance from a realistic understanding of the risks – too optimistic or too pessimistic – can equally threaten or even break the deal.

Bedford: For advisers supporting parties with cross-border transactions that may trigger filing requirements in multiple jurisdictions, having the right network to support with these processes cooperatively and constructively can be fundamental to providing the right level of support. This is particularly important given the evolution and expansions of the various regimes, as it can be important to understand the changes coming down the line. For instance, if thresholds are becoming tighter in a particular jurisdiction, or where the burden of the notification forms are increasing, as will be the case in the US under the expanded HSR requirements, parties may want to push a deal through at an increased pace to get it done before the change takes effect.

Grogan: Parties also need to understand that if the initial review does not go their way, what the consequences and their options might be. Historically, challenges to merger control decisions have had mixed results, such that parties should not assume that prohibitions will be easily overturned. While we are at an early stage in the maturity of FDI regimes, the practical challenges of bringing appeals against those decisions is clear. Taking the UK as an example, not only do parties have a limited window in which to launch the appeal – within 28 days of the decision – it must be based on ‘judicial review’ grounds that focus, for example, on errors of law or fact and irrationality. This will be difficult in circumstances where most of the evidence on which the ISU and secretary of state rely will not be shared with the parties due to the inherent national security concerns.

Navarro: Not all situations that require merger control or FDI notifications will be at risk of findings of competition or national security concerns. But for those that are, then understanding the potential outcomes at an early stage is important to allow informed decision making. It not only informs the deal terms that they will be willing to accept, but early engagement also puts advisers in a better position to manage those expectations, as they will form a key part of discussions from the outset of the transaction. As the court found in the first judicial review of an NSIA decision when rejecting a claim from the thwarted acquirer for compensation, large-scale investors should not be surprised that they may lose money on investments that threaten national security.

FW: To what extent are merger control and national security reviews likely to play a more prominent role in the M&A market? What are your predictions for changes to regulations, procedures and enforcement efforts in this area?

Navarro: In the UK, merger control is already an important consideration based on the interventionist approach taken by the CMA, despite it remaining one of the few voluntary regimes. The CMA has indicated that priorities for the next year include a detailed look at merger remedies, with a focus on how certain types of remedies can lock in pro-competitive efficiencies. The CMA has also signalled its intent to engage with parties on remedies as early as possible in the process. However, whereas Australia is expected to move from voluntary notifications to a mandatory regime in 2026, the CMA has not suggested a similar move, with the limited exception of the new special regime for digital mergers, which sits alongside similar rules for the water and electricity sectors.

Grogan: On the FDI front, we should see the outcome of the ISU’s review of the first three years of the NSIA. The consultation in early 2024 posed extensive questions about the NSIA and the sectors in scope, as well as aspects of the procedure. Responses will have highlighted widely held concerns about the breadth of some categories of activity, as well as the necessity for reviews of internal reorganisations. However, while the ISU’s engagement with the FDI community indicated a good willingness to listen and engage, threats to national security have increased over the last 12 months. As such, increases to the range of sectors in scope are more likely than any substantial reductions. It is also anticipated that the EU will progress plans to strengthen its central position on FDI to address national inconsistencies which might leave some deals, and potentially critical FDIs, undetected and unreviewed.

Bedford: Global political and economic situations are crucial factors in the development of merger control and national security regimes in all jurisdictions, and where there are challenges in the real world, regulators will seek to mitigate the impacts through asserting these controls. These pressures may sometimes push in different directions, with the desire for economic growth and investment balanced against the need to protect against the potential for threats to national security to materialise if unconditional foreign ownership, for example, is permitted over critical infrastructure. Coming out of the 2024 election supercycle we may see some changes to the control regimes that reflect where countries now sit on that scale. Staying on top of the changes, and how they might impact on transactions now and in the future, will continue to be an important focus for dealmakers.

Rixen: Both merger control and national security reviews will increasingly affect the M&A market. Both are subject to an international development to increase their scope of application. Merger control regulations are expanding, particularly to catch smaller transactions for various reasons. These include tackling killer acquisitions, but also competition concerns in general and sometimes even general economic goals. There is a possibility that in response to the Illumina/Grail ruling the EC may revisit its own jurisdictional rules, but a more likely outcome is that member states will further extend their rules. National security reviews have developed from a niche consideration toward a standard transactional review in M&A capturing many sectors. Current trends imply further extensions to catch greenfield investments by foreign investors and even investments by domestic investors in foreign companies which might strengthen foreign capacities in activities that might threaten domestic national security interests.

Roxburgh: The direction of travel for regulatory reviews is toward tightening rather than loosening controls. That, combined with the increasing globalisation of business, means that we are likely to see merger controls and national security reviews being an increasingly relevant part of the M&A market. The introduction of the NSIA in 2021 is a good example of the expansion of the rules that permit regulatory scrutiny of transactions and the trend toward national protectionism – albeit not at the cost of global trade. Recent and imminent changes in government and presidency in the UK and US respectively provide an interesting opportunity to see whether there will be any material changes in either the UK or US regulatory environment, both of which will be critical to the UK deals market.

Lisa Navarro leads KPMG Law’s regulatory & competition law team in the UK and is co-head of the global antitrust & FDI practice group. She has over 20 years’ experience supporting clients with multijurisdictional merger control and FDI screening, notifications and clearances. She can be contacted on +44 (0)7749 587 376 or by email: lisa.navarro@kpmg.co.uk.

Stuart Bedford leads the global KPMG Law team after having joined KPMG in 2023 as head of KPMG Law in the UK. Prior to joining KPMG, he spent over 25 years in a leading international private practice law firm, as well as gaining experience through several senior roles in the industry. He can be contacted by email: stuart.bedford@kpmg.co.uk.

Gerrit Rixen leads KPMG Law’s antitrust & investment control practice in Germany and is co-head of the global antitrust & FDI practice group. He has extensive experience in all areas of antitrust and competition law, in particular regulatory control involving numerous merger control filings to national antitrust authorities as well as to the European, foreign direct investment and foreign subsidy control assessments and proceedings. He can be contacted on +(49) 221 271689 1052 or by email: grixen@kpmg-law.com.

Helen Roxburgh joined KPMG in 2002, moving to corporate finance in 2005 after qualifying in KPMG’s audit practice and became a partner in 2018. She leads KPMG’s public company M&A offering, with particular experience of working with and in relation to public companies on Takeover Code-governed transactions, non-core disposals and strategic acquisitions. She can be contacted on +44 (0)7917 721 651 or by email: helen.roxburgh@kpmg.co.uk.

Annalie Grogan is a UK qualified competition and foreign direct investment lawyer. She provides support to clients during the transaction process, including submitting merger control and foreign direct investment filings on behalf of clients,  with a focus on the private equity and technology sector. She can be contacted on +44 (0)20 7311 1000 or by email: annalie.grogan@kpmg.co.uk.

© Financier Worldwide

THE PANELLISTS

Lisa Navarro

Stuart Bedford

Gerrit Rixen

Helen Roxburgh

Annalie Grogan

KPMG