M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Sunday, July 1, 2007

Senate Passes Bill to Increase Scrutiny of Foreign Acquisitions

On Friday, the Senate passed the National Security Foreign Investment Reform and Strengthened Transparency Act of 2007 on a voice vote.   The proposed legislation would further amend the Exon-Florio Amendment to heighten scrutiny of foreign acquisitions, increase Congressional supervision of these decisions and enhance federal agency input in the process.  The House of Representative had previously on February 28, 2007 approved similar legislation by a vote of 423 to 0.  For an analysis of the House bill see my prior post, the Politics of National Security.  And for an in-depth analysis of the differences between the House and Senate Bills see this detailed client memo published by Wiley Rein.  The differences between the House and the Senate bill are only minor, and the speculation is that lawmakers might therefore bypass the usual conference committee procedure to reconcile these differences; instead, the House could approve the Senate's version of the bill and send it to the White House.  As I stated before when commenting on the House version of the bill:

The effect of these changes would be to make our country less-welcoming of important foreign investment.  While CFIUS review may be necessary in certain circumstances and this bill is one of the more moderate proposals, the bill could still result in increased and undue scrutiny and politicization of foreign takeovers.  We are not France (who has protected its yogurt-maker Danone, from outside takeover, by designating it a national champion).  Our success today can relate back to British investment in our country in the 19th century.  It would be a shame if we hamstrung our continued growth by unduly and irrationally limiting foreign investment.   


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