The recent surge in merger and acquisition (M&A) activity within the legal sector is gaining attention as potentially more than a temporary spike. This uptick is partially attributed to changes in the United States’ approach to national security reviews for transactions involving foreign entities. Under President Donald Trump’s administration, the America First Investment Policy notably accelerated these reviews, which are conducted by the Committee on Foreign Investment in the United States (CFIUS). As a result, lawyers in major firms believe this change could significantly impact the pace and volume of deals.
CFIUS is authorized under a 75-year-old statute to assess transactions for potential security risks. In recent years, it has been empowered to approve, block, or impose conditions known as mitigation measures on transactions. The simplification and speeding up of the review process, as reported by Bloomberg Law, seem to align with a broader governmental push to expedite cross-border business engagements.
In 2023, companies filed 233 notifications with CFIUS, a figure that underscores the increasing involvement of foreign interests in U.S. deals. Legal practitioners argue that a more streamlined approach to addressing national security concerns could encourage more transactions, potentially revitalizing a sector that has seen periods of stagnation in the past.
This development is of particular interest to legal professionals in large law firms, as well as corporate legal departments, where faster processing times for governmental reviews directly impact transaction timelines and client advisories. The focus now lies in monitoring how these policy shifts may continue to influence the M&A landscape and what this means for future foreign investments in the U.S. market.