GERMANY TRENDS AND DEVELOPMENTS Contributed by: Daniel Möritz, Jan Bonhage, Hendrik Bockenheimer, Carl-Philipp Eberlein, Markus Ernst, Matthias Rothkopf, Christoph Wilken and Alexander Rang, Hengeler Mueller
Outlook Worldwide, FDI screening regimes have recently been introduced or extended, and existing FDI controls have been tightened. In light of recent developments in the European security climate, trade relations, state industrial strategies, and increased awareness of technological sovereignty, the further tightening of German FDI screening by an amendment of the exist - ing laws or possibly a new Investment Screening Act as well as a reform of the EU Screening Regulation is under discussion. These developments have established FDI screening matters as a major element of cross-border M&A, in addition to merger control and the additional screen - ing for acquisitions facilitated by third-country subsi - dies under the EU Foreign Subsidies Regulation.
The co-operation mechanism under the EU Screening Regulation should be taken into account for the likely duration of formal FDI screening proceedings. In the event of security concerns, negotiation of mitigation agreements or conditions to a clearance remain on the agenda and can be time-consuming. Despite intensified FDI scrutiny, prohibitions of FDIs remain the exception in Germany. As in the past dec - ade, the German government will likely continue to welcome the vast majority of FDIs. Still, giving ade - quate consideration to FDI screening aspects in trans - actions – based on the MoE’s regulatory practice – remains a central component of cross-border M&A. Careful planning and organisation of FDI filings remain key to easing the FDI screening process.
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