Skip to content
Photo of Grace Kim

Grace Kim

Grace Kim is an associate in Covington’s London office and a member of the Antitrust/Competition Practice Group. She assists clients across a range of industries on transactions requiring foreign direct investment review and on competition/antitrust advisory matters. As a member of the firm’s cross-office FDI initiative, Grace advises on the UK’s National Security and Investment Act and on international foreign direct investment (FDI) filing strategy, working in close cooperation with the firm’s CFIUS colleagues.

Grace previously advised on Anti-bribery and Corruption compliance matters as part of the firm’s White Collar Crime practice. Prior to joining the firm as a trainee, Grace held in-house compliance roles at the European headquarters of a global consumer electronics company and the global headquarters of a UK-based retailer.

Contact:Read more about Grace KimEmail

Executive Summary

  • Geopolitical developments are driving significant investment into the defense sectors in Europe. Acquisitions and investments in these sectors are likely to require multiple regulatory approvals across merger control, foreign investment / national security control, and foreign subsidies.
  • Merger control across the EU and UK is becoming more accommodating for defense deals, with the Commission’s new ‘theory of benefit’ framework and the CMA’s efficiencies guidance expressly recognizing defense readiness, innovation, and scale as part of the competitive assessment.
  • Foreign investment screening is moving in the opposite direction — the revised EU FDI Screening Regulation mandates screening in all Member States and even allied-nation investors face increased scrutiny, as recent cases demonstrate.
  • The EU’s Foreign Subsidies Regulation (“FSR”) is a further regulatory process that investors may need to navigate, introducing additional deal timing and execution risks.
  • Successful deal execution requires an integrated regulatory strategy addressing merger control, FDI screening, and the FSR in parallel — each with distinct logic, timelines, and risk profiles that may require extensive commitments to mitigate.
Continue Reading Navigating European Regulatory Regimes for Defense Sector Investments and Deals

Over the summer, the UK Secretary of State for Business, Energy and Industrial Strategy (“BEIS”) delivered the first decisions, in the form of final orders, under the National Security and Investment Act 2021 (“NSIA”).  We consider these decisions and other cases in the context of the first nine months of the UK’s new (quasi) Foreign Direct Investment (“FDI”) regime.

Key takeaways:

  • The NSIA has broad reach, and BEIS has shown willingness to exercise the powers to review transactions that can stretch beyond mergers and acquisitions, for example, to licensing agreements.
  • NSIA review involves the weighing of a number of factors relating to the target, the acquirer and the level of control being obtained.  Early decisions suggest that target’s products/services and activities are just as important a factor as the acquirer’s identity, among the cases that have engaged the attention of the Investment Security Unit (“ISU”).
  • “Behavioural” undertakings, e.g. involving implementation of security controls or granting of audit rights to regulators appear to be a continuation of trends seen in the predecessor UK ‘public interest’ regime, and similar to other EU FDI procedures.
Continue Reading UK FDI: Decision-making practice emerging under the National Security and Investment Act

On 28 April 2022, the Subsidy Control Bill (the “Bill”) received Royal Assent, becoming the Subsidy Control Act 2022 (the “Act”).  The Act lays the basic framework for the new UK-wide subsidy control regime, which is now expected to come into force in Autumn 2022.  Although the Act primarily addresses…
Continue Reading UK Subsidy Control Bill granted Royal Assent

As we now enter the third week of lockdown in the UK, this blog post rounds-up the steps that the UK Competition and Markets Authority (CMA) and certain other regulators have taken to address the unprecedented challenges facing the country.  This includes targeted relaxation of certain elements of the rules

…
Continue Reading Competition law in the time of coronavirus: UK regulators’ response and approach to the COVID-19 pandemic