A solution was ultimately found as ADNOC agreed to share Covestro’s green technology patents with certain market players and give up an unlimited state guarantee. “The first [merger] clearance decisions suggest that the Commission is seeking workable solutions rather than using the FSR as a tool to systematically block foreign investment, which is a positive signal,” Monard said.
But for Rafique Bachour of Skadden, Arps, Slate, Meagher & Flom, the Commission still needs to sharpen its assessments to target only problematic investment.
“When we advise clients on investment opportunities, a central consideration is the regulatory burden associated with a given jurisdiction. Where that burden is high or uncertain, it inevitably impacts the region’s overall attractiveness for investment,” said Bachour, who advised ADNOC on the deal.
Industry hopes
Despite its limits, the FSR has reassured European businesses exposed to China’s aggressive trade stance.
“Discussions with large European companies operating in procurement-intensive sectors frequently reveal a high degree of satisfaction with the FSR,” said Rogers at Norton Rose Fulbright. “Many believe it is helping to create a more level competitive playing field, especially through the ex-officio investigation mechanism.”
The wind turbine sector, for example, is closely watching the Commission’s investigation of Chinese manufacturer Goldwind, although no outcome is expected before August 2027. Goldwind is suspected of having received state support — including direct grants, tax breaks and preferential financing — that enabled it to undercut European rivals.
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