Foreign direct investment and political considerations in M&A deals: increasing scrutiny in an era of greater protectionism

Summary provided by officers
IBA Corporate and M&A Law Committee

A session at the IBA Annual Conference Toronto 2025, on 5 November 2025

Antitrust Section (Lead)
Corporate and M&A Law Committee

Session Co-Chairs
Audrey Chen, JunHe, Beijing
Alastair Mordaunt, Freshfields, London

Panelists
Neil Campbell, McMillan, Toronto
Andrea L Hamilton, Milbank, London
Meng Lu, Wachtell, Lipton, Rosen & Katz, New York
Bärbel Sachs, Noerr, Berlin

Session summary

The 2025 Toronto session ‘Foreign direct investment and political considerations in M&A deals: increasing scrutiny in an era of greater protectionism’ held on Wednesday afternoon was moderated by Audrey Chen and Alastair Mordaunt, with experts from Germany, Canada and the United Kingdom. In the arena of modern geopolitics, the lines between economic competition and national security have blurred the escalating rivalry between two significant economic powers into a near indistinguishable haze. Such lines have long been defined by tariffs and trade deficits, but they have recently metastasised into a far more complex consequential struggle. The panel discussed how businesses and their advisors can navigate this complex landscape, from deciding where to file to getting the deal through with suitable remedies, etc. Informed by these subjects, the panel discussed the constantly evolving foreign direct investment (FDI) landscape, noting that outcomes are unpredictable when facing various practical challenges. The speakers also provided insights into key considerations, similarities and differences among the approaches taken in the United States, Germany, Canada, the UK and China.

Key takeaways

• A wide range of deals are caught by FDI regimes, for eg, different shareholding levels (ten per cent/20 per cent/25 per cent), voting rights versus share capital and control/non-control, depending on the ‘transaction’ type, such as reorganisations, financing, licensing and asset deals, which means that conducting comprehensive (and upfront) filing analysis is essential;
• the relevant requirements may vary depending on the investment sector, size, location and whether the investment concerns publicly traded companies or state-linked transactions;
• there is an increase in the importance of economic security, arising in regard to both national security and ‘net benefit’ (public interest) reviews, which apply to private sector investors, in addition to state-owned enterprises (SOEs) and ‘state-influenced’ investors.