Reconciling National Security Review with Takeover Regulation in the Global M&A Market

In recent times, there has been an unprecedented surge in national security review (NSR) measures, with host jurisdictions implementing restrictions on foreign investments and intensifying national security scrutiny, especially in the context of cross-border takeover transactions within sensitive sectors. This paper argues that this evolving landscape disrupts conventional takeover regulation in a manner that impedes the operation of the global takeover market. To substantiate this assertion, the paper leans on four paradigms: (1) interest paradigm; (ii) decision paradigm; (iii) information paradigm; and (iv) accountability paradigm. The crux of our policy proposal is to broaden the purview of takeover regulation to encompass national interest considerations. Adopting such a reconciliatory approach would ensure that cross-border takeover transactions are not stymied by the somewhat erratic and whimsical implementation of NSR measures, while preserving the integrity of the rule-based global takeover market without compromising legitimate national security concerns.