Mergers and Acquisitions

On June 13, 2025, President Trump signed an Executive Order authorizing Nippon Steel’s acquisition of United States Steel Corporation (U.S. Steel) pursuant to the transaction parties entering a National Security Agreement (NSA) with the U.S. Department of the Treasury.

On February 21, 2025, President Trump issued a memorandum titled "America First Investment Policy" (the “Policy”), outlining new measures to shape U.S. investment policy. Though the Policy makes it clear that the United States welcomes foreign investment, its overarching theme is that “economic security is national security” and cautions against national security threats from “foreign adversaries” like the People’s Republic of China.

This article will provide a brief overview of EO 14105 and proposed implementing rules, as well as related legislative developments focused on outbound investment screening, and the outlook for outbound investment screening procedures.

*Reproduced with permission from the State Bar of Texas International Law Section. This article was first published in August 2024.

The Committee on Foreign Investment in the United States (“CFIUS” or “the Committee) is an interagency body of the U.S. government that plays a critical role in safeguarding national security by reviewing foreign investments in U.S. businesses and assets. Established in 1975 through an Executive Order issued by President Gerald Ford, CFIUS initially served as an advisory committee to monitor and evaluate the impact of foreign investments on the U.S. economy. Over time, its role has evolved significantly to focus on identifying and mitigating risks to national security posed by such investments.

On November 1, 2024, the U.S. Department of Treasury (“the Treasury”), as chair of the Committee on Foreign Investment in the United States (“CFIUS”), published a Final Rule expanding its authority to review certain transactions involving foreign investment in U.S. real estate. CFIUS has jurisdiction to review certain “covered real estate transactions” located within specific degrees of proximity to sensitive government and military sites. The new Final Rule, which becomes effective on December 9, 2024, includes the addition of 59 new military installations and government sites designated as sensitive, ultimately broadening CFIUS jurisdiction. This Final Rule continues the trend of increasing government monitoring authority over foreign investment in U.S. real estate, a trend reflected at both the federal and state level.

On November 17, 2024, the Department of the Treasury (“Treasury”), in its role as chair of the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”), published a final rule (“Final Rule”) increasing maximum penalties for violations and expanding the Committee’s ability to compel parties to respond to information requests, among other revisions. The final rule becomes effective on December 26, 2024, and is very similar to the proposed rule, dated April 15, 2024, of which we wrote about in our article, Less Bark and More Bite? CFIUS Proposed Rule Enhancing Enforcement Capabilities. 

As deals increase in complexity, and ownership structures are oftentimes opaque and obfuscated, it is important to be mindful of CFIUS’s continued stance of requesting identities of Limited Partners (LPs) in transactions involving investments funds.

In the past five to six years, more transactions being reviewed by CFIUS involve venture capital and private equity deals. This results in more complex ownership reviews, including CFIUS reviewing LPs in investment funds. In its 2024 Annual CFIUS Conference in Washington, D.C., CFIUS emphasized the need to provide information regarding LPs. 

On October 28, 2024, the Treasury Department unveiled its final outbound rule, which regulates U.S. investment in China. According to experts, the rule could actually ensnare U.S. companies, particularly if they have significant Chinese ownership or significant financial connections to China. Managing Member, Olga Torres, shares her key highlights with Foreign Investment Watch.

*Reproduced with permission from Foreign Investment Watch. The article was first published on November 1, 2024.

On July 23, 2024, the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) released its annual report to Congress regarding the Committee’s national security reviews and investigations of certain foreign investment transactions from the preceding year. The report offers valuable insight into the CFIUS review process and highlights the various foreign investment transaction elements that are coming under scrutiny. Even with an overall decrease in global merger and acquisition activity in 2023, CFIUS activity was still significant.

On September 14, 2023, the U.S. Department of the Treasury held the annual Committee on Foreign Investment in the United States (“CFIUS”) Conference in Washington, DC.

Any person or company in the United States that manufactures, exports, temporarily imports, or brokers items, including technical data and software (defense articles), or performs certain services (defense services) that are controlled under the International Traffic in Arms Regulations (ITAR) is required to register with the U.S. Department of State Directorate of Defense Trade Controls (DDTC) and keep that registration current. Current in the context of the ITAR means not only the information that is current at the time the registration is initially submitted, but the registration information must accurately reflect the registered entity’s current information at any point in its timeline. 

On August 9, 2023, President Biden issued an Executive Order (“E.O.”) on outbound investment regulation. This long-anticipated action marks the first time the U.S. government has sought to regulate investments made abroad by U.S. firms.

On July 31, 2023, the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) released its annual report to Congress of the Committee’s national security reviews and investigations of certain foreign investment transactions from the preceding year. The report offers valuable insight into the CFIUS review process and highlights the various foreign investment transaction elements that are coming under scrutiny. 

In our recent article Amid TikTok Tensions, CFIUS Signals Increased Enforcement and Other Updates, we discussed updates from the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) primarily with respect to enforcement. 

As TikTok CEO Shou Zi Chew was facing (often contentious) questions from members of Congress during a four and a half hour hearing on March 23, 2023, many casual observers were learning for the first time about the interagency Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”). 

Torres Trade Law is pleased to share our contribution to “The Law Reviews: Mergers & acquisitions” Review 16th Edition. Our Managing Member, Olga Torres, and Senior Associate, Derrick Kyle, authored a chapter on U.S. Trade Compliance Due Diligence. The chapter focuses on two essential considerations when conducting trade due diligence. The chapter discusses U.S. trade due diligence required for M&A transactions, focusing on successor liability from violations by the target company and the impact of foreign investment reviews triggered by acquisition or investment by foreign persons.

The Mergers & Acquisitions Review provides a practical overview of global M&A activity and the legal and regulatory frameworks governing M&A transactions in major jurisdictions worldwide.

To receive a copy of the book, please email operations@torrestradelaw.com. The number of hard copies is limited and will be given on a first come first basis. 

*Reproduced with permission from Law Business Research Ltd. This article was first published in December 2022.   

On February 4, 2022, the House of Representatives passed the National Critical Capabilities Defense Act of 2021 (“NCCDA”) as part of the much larger America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act of 2022 (“COMPETES Act”). The COMPETES Act has many aims related to shoring up domestic manufacturing, protecting technology capabilities, and generally, as the name suggests, improving the country’s competitiveness with the rest of the world, primarily China.

On June 9, 2021, Momentus Inc., a U.S. commercial space company offering in-space transportation and infrastructure services, as a condition to its acquisition by a foreign-owned company, entered into a National Security Agreement with the Department of Defense (“DoD”) and Department of Treasury. Under this agreement, Momentus was required to “implement increased security measures, hire key positions to provide additional oversight and appoint a [Committee on Foreign Investment in the United States (“CFIUS”)]-approved director to its board of directors.”¹ In doing so, Momentus agreed to mitigate the national security risks associated with its foreign ownership.

According to a new survey conducted by Foreign Investment Watch, both corporate executives and confidential and anonymous, and included separate questions for corporate executives and outside counsel.

Olga Torres provides commentary for the Foreign Investment Watch survey on CFIUS readiness. According to this new survey, both corporate executives and outside counsel feel more knowledgeable about CFIUS and feel better prepared to comply with filing obligations or inquiries from the Committee.

This article first appeared in the Foreign Investment Watch Journal on August 6, 2021 (www.foreigninvestmentwatch.com) and is reproduced with permission.

For many years, the Committee on Foreign Investment in the United States ("CFIUS") has had the authority to review non-notified transactions – deals which have not been submitted to CFIUS for review and approval – but until recently, resources for such efforts were limited. That changed in 2018, when the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”) significantly bolstered resources for CFIUS oversight and enforcement activities.

Any U.S. company that manufactures, exports, or temporarily imports items or performs defense services that are controlled under the International Traffic in Arms Regulations (ITAR) is required to register with the U.S. Department of State Directorate of Defense Trade Controls (DDTC) and keep that registration current. Current in the context of the ITAR means not only the company information that is current at the time the registration is initially submitted, but the information in the registration must accurately reflect the registered company’s current information at any point in the company’s timeline. When certain changes occur within the registered company, such as a change of control, a merger or acquisition, or a change in executive leadership, those changes must be reported to DDTC and the company’s ITAR registration must be updated. At a minimum, ITAR registration must be renewed annually.

On June 9, 2021, President Biden signed an Executive Order (“June 9 E.O.”)1 elaborating on measures to protect the information and communications technology and services (“ICTS”) supply chain with specific emphasis on connected software applications.2 The June 9 E.O. directs federal agencies to (1) assess the threats posed by connected software applications controlled by foreign adversaries, (2) provide recommendations on how to protect sensitive personal data of U.S. persons, and (3) evaluate transactions involving connected software applications that pose risks to U.S. national security. The June 9 E.O. also revokes three Executive Orders issued last fall by former President Trump that targeted several Chinese communications and financial technology software applications, including TikTok and WeChat.

The U.S. semiconductor industry has always been very important to the country’s national security. As a result, the U.S. government ("USG") continues to increase legal protections of the semiconductor industry by imposing certain foreign investment restrictions and export controls.

This article will discuss some of the recent foreign investment deals reviewed by the Committee on Foreign Investment in the United States (“CFIUS”) and recent export controls involving the semiconductor industry.

In 2020, the U.S. Department of the Treasury issued several final regulations to implement the Foreign Investment Risk Review Modernization Act of 2018, which as readers will recall expanded the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”). In addition, the U.S. Government also issued in 2020 several regulatory actions that impact foreign investments, including the identification and review by the U.S. Department of Commerce for “emerging and foundational technologies that are essential to the national security of the United States,” among others. Overall, the final CFIUS regulations along with other regulatory actions call for closer scrutiny of foreign investments and the export controls.

Now more than ever Chinese investment in the United States is facing barriers stemming from the strict reviews conducted by the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”). After several high-profile cases, which our law firm has covered in previous articles and are summarized below, the general consensus is that Chinese investment will be greatly scrutinized – and in many cases completely blocked – to satisfy the U.S. government’s national security concerns.

But even in these uncertain times, we have also seen some Chinese transactions approved by CFIUS, confirming that not all Chinese investment is off limits.

The U.S. Department of the Treasury Office of Investment Security (“Treasury”) published a final rule on September 15, 2020, significantly changing the mandatory filings administered by the Committee on Foreign Investment in the United States (“CFIUS”). 

Most people are familiar with the social media sensation, TikTok, a mobile device application which allows users to create and share short-form videos. It is reported that there have been over 175 million downloads of the application in the U.S. Despite its popularity, most TikTok users are oblivious to how the national security concerns raised by the current White House Administration will affect them. Not to mention many users are probably unaware and will be surprised to learn that TikTok is a Chinese application. Beijing-based, ByteDance Ltd. (ByteDance) is the parent company of TikTok.

On May 21, 2020, the U.S. Department of the Treasury (“Treasury”) published a Proposed Rule that includes two important changes impacting mandatory filings.

Pursuant to the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), the Committee on Foreign Investment in the United States (“CFIUS”) is authorized to review certain real estate transactions by foreign persons in the United States. The regulations at 31 C.F.R. part 802[1] (effective on February 13, 2020), implement CFIUS’s authority to review certain “covered real estate transactions,” involving the purchase or the lease by, or a concession to, a foreign person of certain real estate in the United States. The real estate transactions subject to review include transactions meeting certain criteria and that are in, or around, sensitive sites such as specific airports, maritime ports, and military installations. The airports and maritime ports are identified in the regulations and contained on lists published by the U.S. Department of Transportation. Furthermore, the military installations are listed at Appendix A to Part 802.

On September 17, 2019, the U.S. Department of the Treasury (“Treasury”) issued two proposed rules that would expand the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”).[1] If enacted, these new proposed regulations could have major implications on foreign investment and real estate transactions in the United States and investors and companies must be aware of such potential impact.

On September 17, 2019, the U.S. Department of the Treasury issued a press release announcing two proposed regulations that will implement provisions of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”). The proposed regulations will be published in the Federal Register on September 24, 2019, and they will expand the jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”). Specifically, the two proposed regulations will address certain non-controlling investments and real estate investments by foreign persons. The deadline to submit comments on the proposed regulations is October 17, 2019, and pursuant to FIRRMA the regulations will take effect no later than February 13, 2020.

In April 2019, CFIUS published a notice on its website that in 2018 it had issued a $1 million fine for breaches of a 2016 CFIUS mitigation agreement. 

The Council of the European Union just made investing in the EU more complicated.

On October 10, 2018, the U.S Department of the Treasury issued temporary regulations to conduct pilot programs to implement provisions of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), which became effective August 13, 2018, and amended section 721 of the Defense Production Act of 1950 specifically to protect American technology companies and intellectual property. As Torres Law previously discussed in several articles, the Committee on Foreign Investment in the United States (“CFIUS”) reviews foreign investment in U.S. companies for national security considerations, and FIRRMA has significantly expanded CFIUS jurisdiction.

On August 13, 2018, President Trump signed the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (NDAA) into law. The NDAA contains the Foreign Investment Risk Review Modernization Act (FIRRMA), which makes significant changes to the Committee on Foreign Investment in the United States (CFIUS). This article briefly summarizes a number of changes to the current CFIUS process that will significantly impact foreign companies seeking to invest in U.S.-based businesses. The changes introduced by FIRRMA are the most significant changes made to CFIUS in over a decade.

Past compliance with the full range of international trade, export controls, and economic sanctions laws and regulations should be a critical element of due diligence in mergers and acquisitions. Unfortunately, trade compliance is often overlooked.

The Committee on Foreign Investment in the United States (“CFIUS”) is an interagency body which has the authority to assess the national security implications of transactions that could result in control of U.S. businesses by a foreign person. The CFIUS is chaired by the U.S. Secretary of Treasury and includes representatives from 16 U.S. departments and agencies. Over the last thirty years, the CFIUS has advised the president concerning foreign investment, particularly with respect to transactions that, for one reason or another, the CFIUS believes the president should review in the interest of national security. Under the CFIUS’s guidance, U.S. presidents have only blocked a total of five transactions, two of which have happened in the last six months under President Trump. This article provides a brief summary regarding recent cases and proposed legislation that will impact foreign investment in the United States.

The recent presidential campaign was notable for the debate concerning whether interaction with foreign entities benefitted the U.S. While trade deficits and offshoring of U.S. jobs grabbed headlines, there has been growing attention to the acquisition of U.S. companies by foreign entities.