Beyond Antitrust: How Geopolitics is Shaping Deal Strategy
What General Counsels Should Know to Create Resilience for M&A
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April 21, 2026
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Your deal can clear every competition hurdle but still be stopped in its tracks. Increasingly, transactions could be facing additional hurdles influenced by geopolitical factors – whether the acquisition threatens national security, distorts competition through foreign subsidies or impedes an industrial policy goal, rather than the traditional question of whether it reduces competition.
Geopolitical and national security considerations moved from the periphery to the centre of the global M&A landscape, reshaping deal timelines, contractual structures and regulatory strategy across every major jurisdiction.1 While the United States, UK and Australia have each developed their own distinct pressure points, in the EU the tension between competition enforcement and industrial ambition is strikingly visible.
Friction between competition authorities and government growth agendas has been building for years. The 2019 block of the merger between Siemens and Alstom2 triggered a Franco-German manifesto calling for competition rules to be adapted to allow European companies to compete on the global stage.3 In the years since, issues remain. In October 2025, we saw Olivier Guersent, the EU’s former competition chief, warn against what he saw as a “big is beautiful” approach to merger policy, dismissing the idea that competition policy must bend to industrial imperatives as “naïve”.4
For general counsel advising on cross-border transactions, specific risk areas now demand attention over and above the traditional areas.
The Geopolitical Risks That Should be on Your Radar
Foreign Subsidies
The target companies balance sheet looks clean and competition analysis shows minimal overlap. But what would the answer be if and when the regulators ask “has this company received financial contributions from non-EU governments in the past three years?”
The EU’s Foreign Subsidies Regulation (“FSR”) comes into play here. Adopted in 2023, it casts a wide net to capture grants, loans, tax breaks, guarantees, even preferential access to raw materials from any non-EU state entity. If your target or its investors received more than €50 million in foreign financial contributions over three years, mandatory notification is required as well as a potential in-depth review. Authorities can block deals based on the potential for distortion and could trigger a parallel regulatory process you didn’t budget for, with January 2026 guidance confirming even non-notifiable transactions can be called in for review.5
Foreign Direct Investment
You’re acquiring a 20% minority stake with no board seats and no operational control, meaning that traditional merger control may not even apply. But what if your target operates in critical infrastructure or advanced technology? Are there any non-EU entities in the ultimate ownership chain?
The EU’s revised Foreign Direct Investment Screening Regulation has fundamentally lowered intervention thresholds.6 Any investment enabling “effective participation in management” will be covered by the regulation, including where there is the power to appoint board representatives, even without strategic veto rights. There’s no minimum turnover threshold and the regulation applies to minority stakes, completed transactions, and even portfolio investments if they could influence management.7
Building on its 2023 Economic Security Strategy, the EU published a legislative package in January 2024 proposing that all 27 member states establish mandatory national FDI screening mechanisms, a significant shift from the previous voluntary approach.8 A provisional agreement on the new regulation was reached in December 2025. Critically, the revised framework extends screening to EU-incorporated entities controlled by non-EU investors, closing a loophole confirmed by the European Court of Justice in 2023. Member states are required to share information and coordinate reviews, and authorities can scrutinise investments, including minority stakes where an investor seeks to influence management, on the basis of potential security risks, not just demonstrated threats.
Industrial Policy Pressure
Your deal passes every competition test with markets remaining competitive and no consumer harm. But does it align with regulators strategic autonomy objectives? Does it strengthen or weaken domestic industrial capacity?
The EU is reviewing its merger guidelines, one of the most debated topics on the political agenda, to determine whether and how merger control should tackle issues beyond traditional competition analysis.9 While the EU Merger Regulation itself will remain unchanged, the expectation is that the guidelines supporting it will be substantially changed.10 Regulators now operate under political pressure to protect “national champions,” promote domestic consolidation or block foreign acquisitions in strategic sectors, with these considerations can override traditional competition analysis. Transactions in semiconductors, green technology, pharmaceuticals, and defence face heightened scrutiny regardless of competition effects.11
The significance of these developments lies in the fact that merger control is critical for the economy and for many companies that seek to accelerate growth through acquisition of assets and key technologies. The focus for general counsel has expanded beyond purely legal considerations to include political risk, as transactions that are economically sound can quickly become politically contentious due to shifting geopolitical dynamics, election cycles and media narratives.
What Steps Can You Take?
The intersection between geopolitics and competition policy is global and not new, but it highlights the fact that competition policy is not only a legal or a compliance issue, deeply entangled with and affected by geopolitics.
How should general counsel integrate competition policy into their organisations strategy and decision making to best withstand this regulatory scrutiny, rather than treat is as a late-stage check?
- Redesign your processes by embedding antitrust early in the strategy development, whether planning for an M&A or launching a new product, while assessing geopolitical risk alongside financial and strategic due diligence.
- Build geopolitical intelligence into your regulatory strategy by understanding and anticipating how the broader geopolitical environment may affect the perception of competition authorities and policymakers.
- Engage proactively, not reactively position your transaction and constructively help the relevant authorities to support informed decision-making and mitigate the risk of negative politicisation of deals.
- Plan for different scenarios early in the process, incorporating legal and geopolitical dimensions before formal filings and anticipating concerns that could become formal objections.
- Have a dynamic strategy, that allows for adaptions due to changes in the political environment or legal discussions which could affect the perception of the transaction and the regulatory approvals.
Integrating these three elements will not only increase the operational and strategic resilience of antitrust risks but will also allow corporations to understand and seize opportunities as industrial geopolitics continues to rise.
Footnotes:
1: “Global M&A Outlook 2026: Tariffs cause tension” HSF Kramer (January 14, 2026)
2: “Mergers: Commission prohibits Siemens’ proposed acquisition of Alstom,” European Commission (February 6, 2019)
3: “A Franco-German Manifesto for a European industrial policy fit for the 21st Century,” (February 19, 2019)
4: “EU trustbuster warns against ‘big is beautiful’ merger push,” (July 31, 2025)
5: “Commission publishes Foreign Subsidies Regulation Guidelines,” European Commission (January 9, 2026)
6: Regulation (EU) 2019/452 https://eur-lex.europa.eu/eli/reg/2019/452/oj
7: “EU Regulation on Foreign Direct Investment Screening,” Norton Rose Fulbright (January 2022)
8: “Revision of the EU’s Foreign Investment Screening Mechanism,” European Commission (December 11, 2025)
9: “Review of the Merger Guidelines,” European Commission
10: “Exclusive-EU Looking to Ease Path for pan-European Deal Approvals, Sources Say,” Global Banking & Finance Review (February 12, 2026)
11: “Global trends in government scrutiny of semiconductor transactions: an overview of recent cases,” A&O Sherman (April 3, 2023)
Related Information
Published
April 21, 2026
Key Contacts
Managing Director, Head of Brussels Competition