While merger and acquisition (M&A) activity remains buoyant you would be forgiven for thinking that ‘getting the deal over the line’ is relatively straightforward. That is not always the case. Not all M&A deals are simple, and different issues impact deals in different industries, sectors and jurisdictions to varying degrees.

One of the key issues is regulatory restraints in some sectors, particularly energy, pharmaceuticals, financial services, technology and media sectors. These sectors are heavily regulated for a variety of reasons, usually around concerns about consumer protection, financial stability, national security, the natural environment or other public interest issues.

The last eighteen months have seen a number of moves within Europe to introduce legislation to tighten laws on foreign investment.

These initiatives may have been prompted by increasing moves by Chinese investors to acquire, or at least attempt to acquire, companies active in security-sensitive areas.

In July, the German federal government adopted amendments to the German Foreign Trade and Payments Ordinance, allowing for wider control of foreign corporate takeovers with a view to enhancing the protection of companies that are active in security-sensitive areas and that provide critical infrastructure.

In September, the European Commission introduced proposals for the screening of foreign direct investments on a range of public order and security grounds in critical industries including communications, data storage, energy and transport infrastructure, artificial intelligence and robotics.

Most recently, in October the UK government published a Green Paper setting out proposals to give it greater scope to intervene in takeovers that raise national security concerns.

However, despite such measures European M&A continues to be strong. CMS’s annual European M&A Report and Emerging Europe M&A Report analyse trends in European and emerging CEE/SEE countries, based on a review of private M&A agreements relating to both non-listed public and private companies. The recently published 2018 reports (covering the 2017 calendar year) show that that technology, media and telecoms (TMT), real estate, hotels, energy and infrastructure were particularly busy sectors for M&A deals in 2017. The UK is still the most active jurisdiction, followed by Germany, France and Scandinavia.