Constructive Remedies Accepted in the EU’s First In-depth FSR Decision

In the first in-depth investigation into a merger under the EU’s Foreign Subsidies Regulation (FSR), the European Commission announced that a non-EU state-controlled purchaser supported by an unlimited guarantee has been cleared to acquire EU-based businesses under the foreign subsidies regime, but must remove post-merger financial support for the merged business in the European Union. The decision is a welcome first insight into how the Commission will deal with problematic foreign subsidies in the M&A context and is an example of its willingness to find solutions beyond an outright ban of a transaction.

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