European Union (“EU”) Foreign Subsidies Regulation (“FSR”), a new state aid instrument adopted at the end of 2022, will have a significant impact on transactions in the EU. The FSR impacts any company that is present in or wants the enter the EU, and has received financial support in any form from non-EU governments.
The FSR is game-changing — it imposes notification obligations on companies on subsidies received from non-EU countries and, when those subsidies are considered to distort the internal market in the EU, the European Commission (“EC”) can impose remedies.
Companies will now have notification obligations if they have received foreign financial contributions above a certain amount and are:
(1) acquiring a company that has a turnover of at least EUR 500 million in the EU, or
(2) participating in a public tender with a value of EUR 250 million.
These notification obligations will start to apply on 12 October 2023.