Since the EU adopted the Foreign Subsidies Regulation (FSR), companies must factor FSR into M&A and procurement activities. Freshfields’ global experts provide unmatched guidance to help clients meet the evolving regulatory demands.
The FSR adds a layer of complexity to cross-border M&A and public procurement procedures in the EU.
Structured around three pillars, the FSR introduces: (i) mandatory notification requirements for M&A transactions exceeding specific thresholds; (ii) mandatory notification (or declaration) requirements for public procurement bids above certain thresholds; and (iii) a general investigatory power allowing the European Commission to examine ex officio foreign subsidies that may distort competition in the internal market.
M&A deals
A transaction will need to be notified to the European Commission if:
- at least one of the merging undertakings, the acquired undertaking or the joint venture is (i) established in the Union, and (ii) generates an aggregate turnover in the Union of at least €500m; and
- all undertakings involved in the transaction were granted from third countries combined aggregate financial contributions in the three calendar years prior to notification of more than €50m.
Public procurement procedures
A notification obligation will arise in public procurement procedures in the EU where:
- the estimated contract value is equal to or greater than €250m; and
- the economic operator participating in the tender was granted aggregate financial contributions in the three calendar years prior to the notification equal to or greater than €4m per third country.
Ex-officio Investigations under the FSR
The FSR empowers the European Commission to launch investigations independently when there’s evidence of foreign subsidies potentially distorting competition in the EU market — even below notification thresholds.
Freshfields helps clients navigate the broad scope of the FSR by:
- Advising on notification and declaration requirements
- Conducting risk assessments and managing investigations
- Engaging with EU regulators and stakeholders
- Offering strategic, business-focused compliance solutions
With deep expertise in EU competition law and public procurement and early involvement in landmark FSR cases, Freshfields is well-positioned to guide clients through evolving regulatory landscapes and ensure alignment with strategic goals.
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