Corporate and M&A Activity in 2024

Our Corporate team highlights a number of the main legal developments in 2023 which may affect corporate transactions in Ireland in 2024.

Ireland’s FDI regime becomes law

A new investment screening regime was introduced in Ireland under the Screening of Third Country Transactions Act 2023. It is anticipated that the Act will come into effect in early Q2 2024. The Act creates a new mandatory and suspensory notification regime. The Minister for Enterprise, Trade and Employment will also have a retroactive power to ‘call in’ for review certain transactions that may present risk to security or public order in Ireland. This new foreign investment screening regime will need to be considered in many transactions, as it covers a wide variety of sectors, involves low financial thresholds, and will need to be considered in conjunction with the existing merger control rules.

Read analysis on the new changes under the Act: Ireland’s Draft FDI Legislation Becomes Law

Cross-Border Mobility Regulations

The European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023 were signed into law in May 2023. The Regulations set out the framework in Ireland for cross-border conversions, mergers and divisions involving EEA limited companies. In addition to the updates to the cross-border merger regime, an Irish company can now migrate for the first time to other EEA countries while retaining their legal personality, and also be divided into a number of companies in different EEA countries. The Cross-Border Mobility Regulations provides increased flexibility for Irish companies seeking to restructure on a cross-border basis, and combines this with the objective of social protection, including additional rules to provide for rights to information and participation for employees and protection for members and creditors.

Read our analysis and commentary: New Regulations on Cross Border Conversions, Mergers and Divisions

Foreign Subsidies Regulation introduced in the EU

The Foreign Subsidies Regulation (FSR) introduces a new mandatory notification process concerning foreign financial contributions, which applies in the context of certain high-value M&A deals and public tenders above specified financial thresholds. Notifications will be made to the European Commission. Companies that are active in the EU or plan to invest in the EU or participate in EU public tenders and that have received ‘financial contributions’ from non-EU countries need to ensure they record this information to identify in certain transactions whether a notification will be required.

Read commentary from our Competition & Antitrust team on the FSR: EU Foreign Subsidies Regulation

Comment

It is unusual that we have three pieces of legislation that will potentially impact on corporate transactions in 2024.

The Cross-Border Mobility Regulations will make it easier for companies with limited liability to move between EEA countries and maintain their legal status, or even split into different companies across these countries. This change could lead to more companies merging or reorganising themselves across Europe. However, the Foreign Subsidies Regulation which allows the European Commission to examine financial support given to companies in the EU by countries outside the EU could slow down or complicate deals. Finally, the Screening of Third Country Transactions Act 2023, is expected to come into effect in early 2024. This law makes it mandatory to notify authorities about certain deals, adding another layer of regulation for those looking to invest or do business in Ireland.

Companies and investors engaging with the M&A landscape need to be mindful and have a broad understanding of these new rules to make the most of opportunities and avoid potential pitfalls.

For more information and expert advice on the developments highlighted, contact a member of our Corporate team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.