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The EU Foreign Subsidies Regulation (FSR) and US Companies – How Will It Impact M&A Transactions?

The FSR is the EU’s response to subsidies granted by non-EU countries to companies that could distort the EU’s internal market (“Foreign Subsidies”). Companies supported by non-EU countries, i.e. including the US, may be able to benefit from advantages that EU Member States cannot give to “their” companies because of stricter requirements under EU State aid law. The EU is now closing this regulatory gap with the FSR. The aim is to create a level playing field for all companies operating in the EU’s internal market.

From 12 July 2023 onwards, all companies doing business in the EU will have to consider the issue of Foreign Subsidies, especially when planning M&A activities and participating in public tenders which trigger the relevant thresholds. This may lead to a further notification obligation to the European Commission, including a standstill obligation.

This in turn will affect deal timelines, and the coordination of regulatory approvals will become even more complex. Potential fines in penalties in case of non-compliance with notification requirements are hefty. And the first high-profile investigation of the European Commission has just been opened, while the European Commission has already publicly stated that companies benefiting from the US Inflation Reduction Act may be required to notify their subsidies to the European Commission under new EU rules.

Our panel will outline what the Foreign Subsidies Regulation entails and how it will affect companies doing business across Europe.

Introduction: The FSR in a nutshell – what’s it all about and why does it matter
• Background and why not only subsidies are caught
• The US Inflation Reduction Act and the US angle
• Timeline, Tools & Notification thresholds
• Procedure, Material assessment
• Fines and penalties

Internal reporting obligations – how reporting systems will impact M&A readiness
• (Overly) Broad definition of foreign financial contributions
• Data collection challenges (group-wide stakeholder involvement and reporting standards)
• Is there a practical solution, are there any best practices?

Impact on M&A processes – new challenges
• M&A readiness & Bidder analysis
• Process structuring and FSR filing

Latest update from Brussels – why the European Commission is serious about the FSR
• The European Commission’s first investigation
• Open floodgates for competitor complaints?
• Ongoing consultations

• Sarah BlazekPartner – Antitrust/State Aid, NOERR
• Sonsoles Centeno, Partner, PEREZ-LLORCA
• Joseph F. Kadlec, Partner, TROUTMAN PEPPER
• Rainer Wessely, Representative Responsible for Competition and Justice, DELEGATION OF THE EU TO THE US
• Sascha Leske, Partner – Head of New York Office, NOERR [Moderator]


Jan 23 2024


08:30 - 18:00

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