Foreign Direct Investment (FDI) Reviews
National security reviews of foreign direct investment (FDI) are becoming more prevalent—and more stringent—in countries throughout the world, and can play a critical role in cross-border transactions.
Without a proper strategy at the start of a transaction, FDI reviews can become deal breakers or expose transactions to legal challenges and increased costs. Advanced planning can also help avoid unexpected impacts on the target business's operations and restrictions on the investors' rights with respect to the target.
The expansion and enhancement of FDI review regimes globally—including an expansion of industries subject to review beyond traditional defense-related industries—underscores the need for effective FDI counsel in all relevant countries, from a transaction's inception through its completion. Advance preparation and implementation of a clear foreign investment review strategy are invaluable to obtaining timely approval of transactions consistent with deal objectives.
White & Case has an extensive and integrated global network of FDI practitioners who routinely navigate clients through these evolving and increasingly challenging regulatory landscapes.
Global FDI reviews
Countries worldwide have been aggressively developing or bolstering their FDI review regimes in the past several years, and this trend will continue. A multi-national transaction can face FDI reviews in a number of jurisdictions, raising a variety of timing and substantive challenges. Different countries' processes reflect a variety of key nuances, including whether review is mandatory or voluntary, which industries and transactions are subject to review, how likely mitigation measures are to be required and the timing implications of reviews. Managing FDI review requirements in transactions—often simultaneously in a number of countries—is a complex and increasingly critical aspect of cross-border deal planning.
White & Case's FDI Reviews & US National Security/CFIUS practice includes FDI specialists from throughout our extensive global network providing specialized expertise on FDI review processes in a wide range of countries.
- We have a market-leading Committee on Foreign Investment in the United States (CFIUS) team in the United States, which is discussed in more detail below.
- In Europe, we have highly experienced FDI experts in the key countries with active or expanding FDI review regimes, including Germany, France, the United Kingdom, Italy, Denmark, Finland, Norway, Poland, Spain, Czech Republic, Türkiye, and Russia. While there is still no standalone FDI screening at the EU level, the EU continues to push for a coordinated approach towards foreign direct investments into the EU. The key instrument is the EU Screening Regulation entering into force on October 11, 2020. Other legislative options are also being contemplated, including the introduction of new tools to control the acquisitions and activities of foreign-subsidized companies in the EU. In addition, the EU has stepped up to ensure a coordinated approach towards investments into health-critical EU assets during the COVID-19 pandemic. We are uniquely placed to help clients navigate the complex framework throughout the EU and Europe at large.
- We have FDI experts throughout the Asia Pacific region, including Australia, China, Japan, Singapore, and India.
- Our team also provides FDI expertise in the Middle East, including Saudi Arabia and the United Arab Emirates.
Even in countries where we do not have specialists, our FDI lawyers have strong relationships with experienced local counsel to provide truly global FDI coverage for our clients.
Our FDI specialists work seamlessly with White & Case’s global M&A lawyers, ensuring a fully coordinated team approach to successfully navigate deals to closing. White & Case’s experienced teams develop and implement comprehensive strategies to ensure cross-border transactions are successful, completed in a timely manner and meet our clients’ deal objectives.
US FDI Expertise
White & Case’s top-ranked Committee on Foreign Investment in the United States (CFIUS) team is widely recognized as a market leader on national security matters relating to FDI into the United States. Our team includes highly experienced practitioners well attuned to our clients’ business needs, as well as former CFIUS and Department of Defense officials who offer government-insider perspectives that have proven invaluable to our clients.
White & Case’s CFIUS lawyers are highly specialized and have unparalleled experience counseling clients on CFIUS matters and guiding them through the CFIUS process. We advise deal parties and related third parties on the full range of issues relating to CFIUS, many of which have become increasingly complex as the CFIUS landscape and regulatory regime has evolved. Where appropriate, we also work in conjunction with lobbying, public relations and consulting firms to develop and execute comprehensive strategies in support of sensitive transactions.
We routinely represent companies in CFIUS matters in all stages of a deal, including:
- Deal structuring and other strategic planning
- Negotiating purchase agreement terms to ensure client protection
- Conducting detailed due diligence to determine potential areas of national security concern and assess specific risks associated with the given transaction
- Assessing complex CFIUS jurisdictional matters, including applicability of mandatory filing requirements
- Developing and implementing strategies for engaging relevant government officials and facilitating a smooth process
- Preparing CFIUS filings and managing follow-up inquiries
- Negotiating CFIUS mitigation requirements, the details of which can have substantial operational and cost implications for clients
- Guiding companies through mitigation implementation and helping them ensure compliance with mitigation requirements
Foreign Ownership, Control of Influence (FOCI) mitigation
White & Case's FDI Reviews & US National Security/CFIUS team has unequaled experience developing and advising clients regarding plans to mitigate FOCI under the US National Industrial Security Program, enabling companies under FOCI to bid and perform on classified US government contracts and subcontracts.
Our lawyers have extensive experience navigating companies through the FOCI mitigation process, both in connection with transactions resulting in a cleared company coming under FOCI and for existing companies under FOCI entering the classified market. We work with clients to develop an appropriate FOCI-mitigation plan—such as a Special Security Agreement, Proxy Agreement, Security Control Agreement or FOCI Board Resolution.
In the deal context, we also help companies implement interim FOCI-mitigation measures to enable the cleared company to continue to perform on its classified contracts between closing and execution of its FOCI-mitigation arrangement. Additionally, we advise clients on a wide range of ongoing FOCI-related compliance matters, which can be highly complex and require experienced support.
As part of guiding clients through the numerous requirements and nuances necessary for the US government to allow companies with foreign ownership to perform on highly sensitive classified contracts, our lawyers have extensive experience developing FOCI-related compliance plans. These include an Affiliated Operations Plan (AOP), which enables FOCI-mitigated companies to have a variety of shared services and commercial arrangements with non-mitigated affiliates; an Electronic Communications Plan (ECP) to address electronic security measures; a Technology Control Plan (TCP) to address US export-control requirements; and a Facilities Location Plan (FLP) to enable a FOCI-mitigated company to be located in close proximity to a non-mitigated affiliate. AOPs, ECPs, TCPs and FLPs are highly specific to the given cleared company and form the operational backbone and compliance framework in which companies operate under the FOCI-mitigation agreement.
FOCI mitigation is a highly complex area with critically high stakes for clients, whose ability to bid and perform on classified contracts is often fundamental to their business. Few law firms specialize in this area, and none has our breadth and depth of experience on FOC-mitigation matters.
Team Telecom reviews
Telecommunications transactions involving Federal Communications Commission (FCC) licenses may require a review by the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector, which is commonly referred to as “Team Telecom.” Team Telecom advises the FCC on national security and law enforcement aspects of foreign involvement in the US telecommunications services sector.
Our lawyers are experienced in guiding clients through the Team Telecom process, including:
- Assessing whether a Team Telecom review is likely to be required
- Assessing potential substantive risks associated with a given transaction
- Developing and implementing an appropriate strategy for managing the Team Telecom process, including in parallel with other national security processes such as CFIUS review
- Engaging relevant US government officials and managing the review process
- Addressing complex information requests
- Negotiating mitigation measures to enable the US company to retain its FCC licenses under foreign ownership
AWARDS & RECOGNITION
Awarded CFIUS Team of the Year at the 2021 IFLR Americas Awards
Nationwide International Trade: CFIUS
Chambers Global 2023 – Band 1
Nationwide International Trade: CFIUS
Chambers USA 2022 – Band 1
"Strong standing in the CFIUS arena and considered a go-to firm for CFIUS reviews and FOCI mitigation. Works with a host of industry-leading clients from sectors such as energy and natural resources, financial services and specialty metals."
Chambers USA 2022
Nationwide International Trade: CFIUS
Chambers Global 2017–2022 – Band 1
Nationwide International Trade: CFIUS
Chambers USA 2017–2022 – Band 1
The Legal 500 United States 2018–2022– Tier 2
Farhad Jalinous is recognized as a Leading Lawyer in International Trade by The Legal 500 US 2022
Japanese company in multi-billion dollar cross-border transaction requiring FDI analysis covering over 40 countries, including FDI reviews in multiple jurisdictions.
UK-based private equity group regarding FDI issues in multiple jurisdictions related to contemplated cross-border deal.
European defense company on FDI issues in connection with the sale of a business with operations in a number of countries to another non-US buyer, including reviews in multiple jurisdictions.
EADS (now Airbus) on the German FDI review of the formation of the Atlas Elektronik JV with ThyssenKrupp
A US company in the German FDI review of a divestiture of a global business involving lawful telecommunications interception (cleared with remedies).
Japanese Company in the acquisition of a German company involving FDI assessments of more than 15 jurisdictions and a German FDI review.
Advice to various defense, energy, technology, and healthcare companies on German FDI filing requirements and representation through the review process.
A wide range of foreign investors (including foreign government investors) regarding FIRB issues, including FIRB applications for various infrastructure and renewable energy developments in Australia.
Representation of Boussard & Gavaudan, together with Apax France and Altamir, in relation to the sale of additional share capital and voting rights stake of Gfi Informatique an international leader in SAP solutions to Mannai Corporation.
Advice and assistance to IK Investment Partners in connection with its acquisition of Exxelia Group, a global leading manufacturer of customised passive components.
Representation of Safran USA, Inc. on certain aspects of its US$723 million sale of Morpho Detection, Inc. (explosive detection and aviation screening) to Smiths Group plc.
Representation of FCC Aqualia on its acquisition of the French water company SPI Environnement.
Representation of a leading German provider of software and hardware solutions on its acquisition of a French company providing data-management solutions.
Representation of a Belgian MedTech investor on its acquisition of a leading French company active in genomic research.
Chinese company Will Semiconductor on the CFIUS review of its US$2.2 billion acquisition of Beijing OmniVision Technologies, which designs and develops image sensors.
CFIUS counsel to Australian-based IFM Investors regarding its acquisition of Buckeye Partners, L.P., which has one of the largest diversified networks of integrated midstream assets, in an all-cash transaction valued at US$10.3 billion enterprise value and a US$6.5 billion equity value.
Canadian-based Brookfield Asset Management Inc. regarding the CFIUS review of its $8.4 billion acquisition of Genesee & Wyoming Inc., which owns or leases 120 freight railroads worldwide.
Outbrain Inc., a digital advertising company, on CFIUS matters with respect to the acquisition of Outbrain’s share capital by Israel-based Taboola.com Ltd.
Safran, a French aerospace and defense company, in various CFIUS reviews, including with respect to its $7.7 billion acquisition of Zodiac Aerospace. We have also represented Safran on FOCI mitigation matters enabling certain of its US subsidiaries retain US security clearances.
Chinese private equity group on CFIUS matters in connection with several semiconductor- and technology-related transactions.
AIXTRON in the CFIUS review in connection with the sale of its Chemical Vapor Deposition (CVD) and Atomic Layer Deposition (ALD) business to Eugene Technology, Inc., a South Korean company.
Capgemini, a European information technology company, on CFIUS and industrial security matters pertaining to its acquisition of Leidos Cyber.
SDIC Fund Management, a Chinese investment firm, regarding CFIUS issues related to an investment by Future Industry Investment Fund, a Chinese limited partnership for which SDIC Fund serves as the general partner, into Joyson KSS Holdings, a maker of automotive safety solutions.
AMP Capital, an Australian financial services company, in CFIUS and Team Telecom reviews in connection with its acquisition of Everstream, a US super-regional network service provider providing fiber-based Ethernet, internet, and data center solutions.
Japanese conglomerate holding company before CFIUS in connection with multiple transactions in the technology space.
Japanese company in several acquisitions of US information technology consulting companies, including establishing a Proxy Agreement to mitigate FOCI.
Taiwanese company regarding CFIUS issues in connection with its acquisition of a US manufacturer of silicon wafers.
State-owned petrochemical company in the Middle East and its US branch regarding CFIUS issues in connection with several transactions in energy and industrial industries.
Eastern European investor in the CFIUS review and investigation of its acquisition of mining assets in the US.
CFIUS counsel to Middle Eastern Sovereign Wealth Fund in connection with the acquisition of interests in several wind farms.
Representation of numerous companies regarding the establishment of FOCI mitigation agreements and/or compliance with FOCI mitigation agreements, including companies with ownership from Australia, Austria, the British Virgin Islands, Canada, the Cayman Islands, Denmark, France, Ireland, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland, and the United Kingdom.