EU Trends and Developments Contributed by: Vedran Obradović, Andrei Demian and Karoline Zehetmayer, LeitnerLaw Rechtsanwälte
Germany and France. The transaction created one of the world’s largest integrated coffee and beverage platforms. Vodafone (United Kingdom) – Merger with Three UK (United Kingdom) In May 2025, Vodafone and CK Hutchison’s Three UK completed their merger at approximately GBP16.5 bil - lion. The merger created one of the UK’s largest tele - communications providers, enabling significant econ - omies of scale in the development of next-generation 5G infrastructure. Key Legislative and Regulatory Developments Regulation continues to play an increasingly central role in European M&A, not only as a legal requirement but as a key factor shaping deal timing, structure and overall transaction certainty. This trend was further reinforced by developments across foreign invest - ment control, merger control and European company law initiatives. Update to foreign direct investments (FDI) regulations FDI screening in the EU is moving toward a more har - monised framework. Following a political agreement in late 2025, a revised EU FDI Screening Regulation that will replace the existing framework under Regula - tion (EU) 2019/452 is expected to be adopted in 2026, with implementation likely beginning in late 2027. A central change is the move to mandatory screen - ing mechanisms across all Member States, combined with minimum standards and greater coordination at the EU level. While most jurisdictions already have regimes in place, the revised framework will ensure more consistent application, particularly in sensitive sectors such as critical infrastructure, advanced tech - nologies and defence-related industries. The scope of review will expand. In addition to direct foreign investments, the regime will also capture indi - rect investments made through EU-based entities that are ultimately controlled or owned by non-EU inves - tors. This significantly limits deal structuring flexibility and increases the number of transactions potentially subject to review.
From a transaction perspective, parties to transac - tions subject to FDI regulations already need to plan sufficient time for regulatory reviews and consider FDI screening requirements when structuring their deals and will need to do so even more in the future. Mandatory filings and standstill obligations mean that transactions cannot be closed prior to clearance and enhanced coordination across Member States may lengthen approval timelines, particularly in cross-bor - der deals. In addition, the possibility of post-closing reviews and the increased scrutiny of corporate transactions involving sensitive sectors further heighten regulatory risk. As a result, FDI analysis has become a core ele - ment of transaction planning, requiring early assess - ment and careful structuring to ensure deal certainty. European Court of Justice (ECJ) Decision in Illumina/Grail One of the most important recent developments in European merger control is the ECJ’s decision in Illu - mina/Grail. The Court clarified that a Member State that lacks jurisdiction under its national merger control rules cannot refer a transaction to the European Com - mission under Article 22 of the EU Merger Regulation (EUMR). In doing so, it rejected the Commission’s 2021 policy of using Article 22 to capture below-threshold transactions, particularly in innovation-driven sectors such as technology and life sciences. The judgment is significant because it reinforces the role of turnover-based thresholds as a key safeguard for predictability and legal certainty. The ECJ empha - sised that companies must be able to determine in advance whether a transaction is subject to merger control, which authority is competent and whether a standstill obligation applies. This is particularly rele - vant for acquisitions of start-ups and other high-value targets with limited revenues, where legal uncertainty has become a major challenge for transaction plan - ning. For the M&A practice, the decision represents a clear improvement in transaction certainty. It reduces the risk that transactions falling below both EU and national thresholds may nonetheless be subject to EU merger review through referrals by authorities lacking
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