The questions surrounding a cross-border acquisition don’t stop with ownership or market share.
Governments increasingly want to understand what technologies are changing hands, who controls them and whether those assets could affect economic resilience or national security in ways that were barely contemplated a decade ago.
Christine Graham, partner at Bryan Cave Leighton Paisner LLP, told Competition Policy International (CPI), a PYMNTS company, in an interview that foreign direct investment screening has expanded alongside changing geopolitical conditions and a broader understanding of what constitutes a strategic asset.
“I would say that national security is not defined as a term, and that’s intentionally so,” Graham said. “This concept of national security has evolved and has moved closer toward economic security.”
Sectors that once attracted little attention may now face review because governments regard them as important to supply chain resilience, technological leadership or critical infrastructure. The result is a regulatory environment in which investors must think well beyond conventional merger analysis.
The challenge is not simply identifying whether a filing is required. It is understanding how regulators view the technology itself, the relationships surrounding it and the potential consequences of foreign ownership.
Graham noted that governments are “looking more at inward investment and protecting national champions, building resilience across supply chains,” reflecting a broader policy objective that extends beyond traditional defense concerns.
For multinational companies, the implications begin long before closing documents are signed.
Screening Regimes Keep Moving
One reason foreign investment reviews have become more difficult is that regulators are attempting to govern technologies that develop far faster than legislation.
“The biggest challenge that you’ll find for an FDI screening authority,” Graham said, “is how do you plan for the future? How do you know what the threats will be in five to 10 years’ time?”
Rather than attempting to predict every future risk, many jurisdictions have drafted broad categories that give authorities flexibility to review transactions touching sensitive sectors or critical infrastructure. That approach provides governments with discretion but leaves investors navigating definitions that may not always be clear.
According to Graham, those wide nets can create uncertainty in practice because businesses often struggle to determine whether a transaction falls within mandatory review requirements.
The pace of change also means screening regimes themselves continue to evolve. Governments revisit sector definitions, adjust notification requirements and expand their powers as new technologies emerge and geopolitical priorities shift.
For investors, that changing landscape requires preparation rather than assumption.
“It’s really important to understand your portfolio companies,” Graham said. “What products do you have? What are the key technologies? What are the key supply arrangements?”
That knowledge becomes valuable during acquisitions, fundraising efforts and eventual exits. It also allows companies to anticipate regulatory concerns before they become obstacles.
The legal analysis itself has grown more interconnected with other compliance disciplines. Export controls, sanctions, merger reviews and investment screening increasingly overlap, making transaction planning more complicated than in previous decades.
Graham believes businesses should understand not only their operations but also the relationships that surround them, including government customers, export classifications and strategic technologies that could influence regulatory review.
The expanding focus extends beyond physical assets.
“Authorities now will probably look more closely not just at what is being acquired, but also what access that acquisition presents to personal data, sensitive data, and how that could be used to impact national security,” Graham said.
That observation points to a broader change in regulatory thinking. Information itself has become a strategic asset. The value of a transaction may lie not only in factories or patents but also in the data those businesses generate and the access those assets provide.
As governments continue refining their screening frameworks, investors face an environment where geopolitical awareness has become part of ordinary transaction planning. Success increasingly depends on understanding technologies, supply arrangements and data holdings before regulators begin asking questions.
The expanding definition of national security suggests that foreign investment screening will remain a dynamic area rather than a settled one. Companies that build those considerations into due diligence from the outset may find themselves better prepared as governments continue adapting their rules to a changing technological landscape.
Watch the full interview to learn more about:
- Why governments increasingly view economic security as part of national security.
- How rapidly changing technologies are forcing regulators to rethink investment reviews.
- Why understanding technology, supply chains and data may determine whether a cross-border deal succeeds.
