On October 17, 2024, the European Commission (“Commission“) published its forth annual report on the screening of foreign direct investments (“FDI“) into the Union (the “Report“), following previous editions published in October 2023, September 2022 and November 2021. Notable findings include the follow:
- The majority of M&A-driven FDI into the EU have originated from investors in the U.S. and the UK.
- FDI continues to land primarily in Western Europe, and targets 5 sections – Manufacturing, ICT, Professional, Scientific and Technical activities, Finance, and Retail.
- 22 EU Member States have an active FDI regime; the remaining 5 are expected to join shortly.
- Despite a significant decline in the overall number of M&A in the EU, FDI filings reviewed within the EU screening cooperation mechanism have further increased – 488 in 2023 (56% leading to a decision), up from 423 in 2022, 414 in 2021 and 265 in 2020.
- 85% of those 488 filings originated from 7 EU Member States – Austria, Denmark, France, Germany, Italy, Romania and Spain.
- Only 8% of the cases went to Phase II (down from 13% in 2022); in <2% of the cases the Commission issued an opinion; in 6% of the cases another Member State submitted comments.
- 85% of notified deals were cleared unconditionally; 10% required remedies and 5% were prohibited/abandoned, in line with statistics from recent years. Notable exception is France where 44% of clearance decisions in 2023 were subject to remedies.
- Defense (26%), aerospace (22%) and semiconductors (17%) were the main sectors subject to a Phase 2 review.