Washington Gridlock and Dealmaking
As appeared in The Deal
February 3, 2012
As observed by The Deal, election years often pull energy and resources away from “the slow grind of legislating.” In this context, the authors reviewed some pending legislation affecting dealmakers, concluding that “even modest achievements [this year] appear unlikely.”
In the area of national security, major 2008 legislative changes governing the review of takeovers of US companies by foreign-owned buyers are still having an impact, making it much more likely that reviews by the Committee on Foreign Investment in the US (CFIUS) will proceed to the second stage of a 45-day investigation.
According to Kaye Scholer Partner Farhad Jalinous, who focuses on such CFIUS reviews, “Nearly one-third of CFIUS-examined deals are going to 45-day investigations.”
“I’m not convinced all these deals were problematic or required an investigation, but the review process has become more intense,” he added. “To ease the pressure on investigator and merging parties alike, Treasury officials are encouraging merging parties to bring their deals before CFIUS before making a formal filing for approval.”
“Treasury is trying to engage parties on mitigation as soon as possible so you can still have resolution quickly,” he concluded.