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The European Union has set up a new framework to scrutinise foreign direct investments for national security reasons. Hallam Chow, our partner and head of projects for China, was asked by GlobalCapital Asia to share comments on its impact on Asia’s leveraged and acquisition financing market.

Hallam said “Unlike CFIUS [the Committee on Foreign Investment in the US] the proposed EU rules are not an overriding regulation that would block potential inbound acquisitions, but rather a reporting and monitoring mechanism to share information between EU member states. It does not impinge on an individual country’s ability to approve or reject mergers.”

He also suggested that any Chinese buyers looking at potential acquisitions “need to give more time for merger approvals than before, as Chinese buyers tend to be quite optimistic on timing, but given the new guidelines it is no longer the case that you can push it through in two or three months.”