Bloomberg Law Quotes Kevin Wolf on Impact of CFIUS Changes on M&A Deals

Akin Gump international trade partner Kevin Wolf was quoted in the Bloomberg Law article “New Law Guides M&A Investment and Security Priorities.” According to the article, the Foreign Investment Risk Review Modernization Act, passed last August, reflects the biggest changes in more than a decade to the process in which acquisitions receive approval from the Committee on Foreign Investment in the United States (CFIUS).

“For covered transactions, the new requirements could add weeks, and maybe months, of delay to many transactions before they can close,” said Wolf, a CFIUS member during the Obama administration.

The article reports that, under the new law, transactions previously considered low-risk could be significantly affected. This includes non-U.S. acquisitions of small U.S. technology companies.

For M&A lawyers advising a U.S. business on such deals, Wolf advises to “consider its [U.S. government] contract work, proximity to government facilities, and sensitive research or information held by the U.S. business.

On the flip side, Wolf suggests that a foreign buyer seeking approval for a deal, “consider its ownership structure, any foreign government ties, links to sanctioned parties, and agenda for the U.S. business. Determine whether non-controlling foreign investors gain broad rights, informational access, or involvement in certain decision-making.”