Managing Antitrust and Foreign Investment Reviews

Introduction: Regulatory Friction at the Crossroads of Strategy

In cross-border and large domestic M&A, regulatory reviews are not a footnote. They are often the rate-limiting factor. Antitrust scrutiny and foreign investment reviews (FIRs) increasingly influence deal timelines, structure, and certainty. CFOs must treat these reviews not as compliance hurdles but as strategic gating items that demand rigorous planning and scenario modeling.

Antitrust Review: The New Normal of Enforcement

Across jurisdictions, antitrust authorities have become more aggressive. The Federal Trade Commission (FTC) and Department of Justice (DOJ) in the U.S., along with the European Commission and China’s SAMR, now evaluate deals not just on market share but on competitive behavior, data control, and ecosystem impact.

In a Series C acquisition of a healthtech firm, we encountered antitrust review due to data aggregation concerns. Our market share was below traditional thresholds, but the target’s control of patient data raised vertical integration flags. We had to offer behavioral remedies and carve-outs to proceed.

CFOs must model:

• Market concentration indices (HHI pre- and post-deal)
• Overlap analysis by geography and product line
• Likelihood of second requests and timing implications

We now conduct a “regulatory war game” for every deal over $100 million or involving sensitive sectors (e.g., fintech, healthtech, energy).

Foreign Investment Review: National Security Meets Capital Flow

In the U.S., the Committee on Foreign Investment in the United States (CFIUS) evaluates deals for national security risk. Similar bodies exist in the UK (Investment Security Unit), Germany (BMWK), and others.

Triggers include:

• Foreign buyer involvement
• Critical technologies or infrastructure
• Access to sensitive personal data

In a cross-border SaaS acquisition, we underestimated CFIUS interest. The buyer’s parent was based in a U.S.-allied nation, but the software processed defense contractor data. We ended up in a 10-month review cycle, adding $2 million in legal fees and deferred revenue impact.

Pre-Transaction Planning

The best defense is early action. Steps include:

• Mapping jurisdictions where filings are required
• Engaging local counsel in each
• Preparing clean room protocols for sensitive data access
• Modeling cost of delay (e.g., working capital burn, FX exposure)

In a semiconductor deal, we pre-negotiated a reverse termination fee tied to regulatory outcomes. This shared the risk and signaled confidence.

Communications and Stakeholder Management

Investors, employees, and customers need assurance during drawn-out reviews. We draft tailored FAQ documents and investor memos outlining:

• Nature of the reviews
• Expected timelines
• Contingency plans

When a deal is blocked or delayed, CFOs must also prepare for accounting impacts, such as deferred transaction costs or impairments.

Conclusion: Regulatory Intelligence as a Strategic Lever

CFOs who proactively manage antitrust and FIRs can unlock optionality, preserve valuation, and maintain timeline control. This is no longer a legal function alone. It is an executive discipline that requires financial modeling, communication planning, and deal architecture to intersect.

Insight

One of the earliest lessons I learned in Silicon Valley was that regulatory friction is not a bottleneck—it is a forcing function. It compels teams to sharpen their strategy, test their assumptions, and build more resilient deal structures. This has never been more true than in the current environment of global regulatory assertiveness. Whether you are navigating antitrust scrutiny or foreign investment reviews, what used to be procedural is now existential.

In the past ten years, I have participated in more than a dozen deals that triggered antitrust or foreign investment scrutiny. Each one presented its own flavor of complexity. But what separates successful transactions from failed ones is not the presence or absence of reviews—it is how early and rigorously those reviews are integrated into deal planning.

Take the example of our Series C acquisition of a healthtech firm. On the surface, there was no immediate cause for concern. Our combined market share was modest. But our lawyers flagged a risk: by acquiring the target, we would consolidate control over a unique patient data set. The Federal Trade Commission flagged the potential for vertical integration that could restrict competitor access. We had to propose a consent decree that ensured data interoperability for third parties and limited our use of specific metadata. This took six extra months to resolve but preserved the deal’s value and avoided a divestiture.

This is the new normal. Regulatory authorities have moved beyond pure market share analysis. They now ask whether the transaction stifles innovation, concentrates control over data ecosystems, or affects labor markets. For CFOs, this means that financial modeling must go hand in hand with antitrust risk modeling. We now routinely run Herfindahl-Hirschman Index calculations on our internal dashboards. If the index changes by more than 200 points, we immediately loop in antitrust counsel. That is the discipline we have built.

Foreign investment reviews are another evolving frontier. The Committee on Foreign Investment in the United States, known as CFIUS, has broadened its scope dramatically. The days when it only applied to defense contractors or aerospace are long gone. Today, if your product touches data, infrastructure, or critical technology, expect scrutiny.

In a cross-border SaaS deal involving a buyer headquartered in a U.S.-allied country, we assumed we were in the clear. But our platform processed data for subcontractors of the Department of Defense. That triggered CFIUS jurisdiction. We were thrust into a 10-month review, which cost $2 million in legal and advisory fees and forced us to defer key customer renewals. Worse, we had not modeled this timeline, so our post-close integration plan collapsed. We learned that foreign investment risk must be modeled not just as a legal item, but as a core business scenario.

Pre-transaction planning is essential. We now initiate regulatory mapping alongside financial diligence. This includes identifying jurisdictions where filings are mandatory, evaluating control thresholds, and checking for sector-specific triggers like encryption or critical minerals. We also map out filing timelines and engage with local counsel early. In deals where sensitive data is involved, we establish clean rooms for diligence access, monitored by independent third parties. This helps avoid premature exposure and signals good governance.

Scenario planning also includes modeling the cost of delay. If a deal is likely to face a second request or extended review, that delay has a working capital impact. We now include a delay-adjusted internal rate of return metric in our board materials. This has helped us make smarter go/no-go decisions.

In some deals, we negotiate reverse termination fees tied to regulatory outcomes. These are particularly useful in transactions involving cross-border sensitive sectors. One semiconductor acquisition involved a $25 million break fee, payable if approval was not secured within 12 months. This helped align buyer and seller incentives and provided a clear risk-sharing mechanism.

The human side is just as important. Long regulatory reviews can create morale issues, investor anxiety, and customer churn. We have learned to manage this through proactive communication. We prepare FAQ documents for employees and customers, update our investor Q&A scripts, and rehearse response scenarios for blocked or delayed transactions. When a deal is ultimately abandoned due to regulatory friction, the communication plan must shift immediately to internal stabilization and external explanation. CFOs must own this narrative.

Finally, regulatory reviews have financial reporting implications. Deferred transaction costs, delayed synergies, and potential impairments must be modeled. In one transaction, the delay caused us to revalue earnout targets, update fair value assumptions, and change our deferred tax treatment. These adjustments fed into our quarterly forecast and investor guidance. Regulatory intelligence is not just a legal issue—it becomes a GAAP issue.

The deeper insight here is that regulatory risk is not merely a cost center. Handled correctly, it is a value unlock. I have seen deals gain leverage when we proactively addressed antitrust concerns and offered structural remedies. Regulators appreciate candor and preparedness. We now build draft remedy proposals into our deal playbooks. That small investment has paid off time and again.

In closing, managing antitrust and foreign investment reviews is no longer the purview of outside counsel alone. It is a core executive responsibility, blending law, finance, communication, and strategy. For CFOs, the mandate is clear: elevate this discipline. Build internal capabilities. Run the war games. Model the scenarios. And remember, the goal is not just clearance—it is certainty, timeline control, and retained deal value.

Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult qualified advisors before engaging in transactions subject to regulatory review.