Cross-Border M&A in Southeast Europe: Regulatory Challenges

Cross-border M&A in Southeast Europe is increasingly shaped by regulatory layering rather than by deal structure alone. For transactions involving EU-facing businesses or assets, parties now need to think beyond classic merger control and assess, in parallel, whether foreign direct investment screening or the EU Foreign Subsidies Regulation may also apply. The EU FDI Screening framework has applied since 11 October 2020, while the Foreign Subsidies Regulation has applied since 13 July 2023, adding another important review track for certain concentrations.

In practical terms, this means that a single deal may trigger several distinct questions at once: whether the transaction must be notified for merger control, whether it raises security or public-order concerns under FDI rules, and whether foreign financial contributions received by the parties could require notification to the European Commission under the FSR. In relevant cases, the FSR can require prior notification where the target has at least EUR 500 million EU turnover and the parties have received more than EUR 50 million in foreign financial contributions in the previous three years.

For Southeast Europe, the challenge is intensified by regional fragmentation. Some jurisdictions are EU Member States and therefore fully integrated into EU merger, FDI and subsidy-related frameworks, while others operate under standalone national merger-control systems that are converging with, but are not identical to, EU practice. As a result, transaction planning in the region often requires a jurisdiction-by-jurisdiction review of filing thresholds, timing, standstill obligations and substantive risk.

Another source of uncertainty is that transactions falling below ordinary turnover thresholds may still attract regulatory attention. The European Commission notes that, under Article 22 of the EU Merger Regulation, it may examine mergers referred by national competition authorities in certain circumstances, which has reinforced the need for early antitrust risk assessment even where no obvious filing obligation exists at the outset.

The key lesson for investors and sellers is straightforward: in Southeast Europe, regulatory analysis must start early. In cross-border deals, timing, conditions precedent, document drafting and closing risk are increasingly driven by the interaction of merger control, FDI screening and foreign-subsidy review. The most successful transactions are therefore not simply well negotiated, but well mapped from a regulatory perspective from the beginning.