EU Trends and Developments Contributed by: Vedran Obradović, Andrei Demian and Karoline Zehetmayer, LeitnerLaw Rechtsanwälte
jurisdiction. This is especially relevant in competitive and innovation-driven sectors, where buyers previ - ously faced the risk of unexpected regulatory inter - vention. However, the decision does not eliminate regula - tory risk for transactions below the threshold. Sev - eral Member States have introduced call-in powers allowing authorities to review transactions even where traditional thresholds are not met. In addition, jurisdic - tions such as Germany and Austria apply transaction value thresholds to capture deals involving strategi - cally relevant targets with limited turnover. Further - more, the ECJ’s earlier Towercast judgment confirmed that, in exceptional cases, completed transactions may be reviewed ex post under competition law rules. As a result, while Illumina/Grail strengthens legal cer - tainty, it does not fully remove complexity. For deal - makers, the focus has shifted from EU-level referral risk to national review mechanisms and other ex post tools. Competition analysis, therefore, remains a criti - cal element of deal planning, particularly in transac - tions involving innovative or strategically sensitive targets. EU Inc. – a new European corporation Another notable development is the EU’s “EU Inc.” ini - tiative, which reflects a broader effort by the European Commission to strengthen the competitiveness of the European internal market. The initiative addresses a long-standing structural challenge: companies oper - ating in Europe continue to face significant fragmenta - tion, with 27 different national legal systems governing incorporation, financing and corporate governance. The objective of EU Inc. is to reduce these barriers by introducing a new, optional European corporate form that enables companies to operate more easily across borders. The initiative was publicly announced by the European Commission and has since evolved into a concrete legislative proposal presented in March 2026. The proposal is structured as an EU regulation, which would apply directly across Member States and aims to create a more harmonised legal framework for companies.
EU Inc. is designed primarily for start-ups, scale- ups and growth-oriented businesses. It is intended to complement existing national company forms and differs from the European Company (SE), which is generally seen as complex and better suited to large corporates. By contrast, EU Inc. aims to provide a simple, digital and cost-efficient structure tailored to the needs of innovative and fast-growing companies. Key features of the proposed framework include fully digital incorporation within a short timeframe, low or no minimum capital requirements, standardised doc - umentation and simplified corporate processes. The proposal also envisages easier capital raising, flexible share structures and more practical employee partici - pation models, including cross-border equity incen - tive schemes. Overall, the concept is “digital-first” and designed to reduce administrative burden throughout the lifecycle of a company. From an M&A and investment perspective, EU Inc. has the potential to be particularly relevant. A more uniform corporate structure could simplify cross- border investments, reduce legal complexity in due diligence and facilitate post-closing integration. It may also make European start-ups more attractive to inter - national investors by providing a more familiar and predictable legal framework. At the same time, important limitations remain. The proposal still relies on national rules in key areas such as taxation, employment and insolvency law and further legislative development will be required to achieve meaningful harmonisation. Its ultimate impact will therefore depend on how far the final framework reduces existing fragmentation in practice. Nevertheless, EU Inc. represents a significant policy signal. If successfully implemented, it could strength - en the European start-up ecosystem and help make Europe a more competitive environment for innova - tion, growth capital and technology-driven M&A. Outlook for 2026 Europe entered 2026 with a cautiously positive out - look, but a return to pre-2022 deal dynamics remains unlikely. Deal activity is likely to remain moderate in volume, while overall value is driven by a limited
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