2024.04.08 ISM Roundup

Written by
Gabriella Couloubaritsis
April 8, 2024

Bulgaria Launches First ISM 

Sources: UNCTAD, Legislation 

This past month, Bulgaria introduced its first investment screening mechanism, implementing the screening mechanism outlined in the EU Regulation 2019/452. The mechanism requires prior clearance related to national security and public order for non-EU, direct or indirect foreign investments which exceed 10% of the capital of the Bulgarian entity being acquired or EUR 2 million in value, involve high-tech activities, or include greenfield or material change to the production process in existing enterprises. Last summer, the country began the process of amending the Investment Promotion Act. 

Media Outlets Report Italy May Review ~$870M USD LNG Deal 

Sources: Reuters, VTTI Press Release 

According to Reuters, the Italian government is expected to review a proposed ~€800M (~$870M USD) majority stake purchase in Italy's biggest liquefied natural gas terminal by the Dutch infrastructure group VTTI and German asset manager IKAV. The government uses its "golden power" rules for transactions within industries of strategic importance such as banking, energy, telecoms, and health, and this particular LNG terminal supplies 14% of the country’s gas consumption. Italy is the EU’s second largest energy consuming country. Under the deal, ExxonMobil is expected to sell its 70.7% stake in the LNG terminal as part of a broader strategy to divest non-strategic assets. QatarEnergy is also reportedly divesting its 22% stake. Italian gas grid operator and state-controlled group Snam owns a 7.3% stake in the infrastructure. This group has 45 days to decide whether to exercise its right of first refusal to up its stake, deciding to increase its LNG terminal ownership to 30%. 

$32.5M USD Energy Deal Parties Report Expected ISP Review 

Source: Landinfra Press Release 

Sweden-based Landinfra Energy AB and France-based Eiffel Investment Group through its managed investment funds Eiffel Infrastructure Vertes and Eiffel Transition Infrastructure are expecting to jointly develop and own a renewable energy portfolio including  solar power, wind power, and energy storage projects. Laninfra said that the completion of the transaction is subject to the approval of the Swedish Inspectorate of Strategic Products. Once built, the portfolio is expected to generate around 2 TWh of green energy annually to the Swedish energy system. 

Shipbuilder Reports Rejecting $662M USD Takeover Offer Over Regulatory Concerns 

Source: Yahoo Finance

This past week, Australian shipbuilder Austal announced that the firm had rejected a takeover offer from South Korea's Hanwha Ocean as it was unlikely to be approved by Australian and U.S. regulators due to the sensitivity of its operations. The approvals needed would include Australia's Foreign Investment Review Board (FIRB), the Committee on Foreign Investment in the U.S. (CFIUS) and the U.S. Defense Counterintelligence and Security Agency. Last year, the firm signed an initial agreement with the Australian government to become a strategic shipbuilder, meaning the firm becomes a national asset and thus can only be sold to companies within the AUKUS alliance countries, including US-UK-Australia. Additionally, Austal is also a prime contractor designing, constructing, and sustaining ships for the U.S. Navy. Hanwha Group is South Korea's seventh-largest conglomerate with almost $60 billion USD in assets across energy, defense, and financial services. Hanwha had reported that they were willing to accept all reasonable conditions to receive FIRB approval and it had been advised by a global law firm that CFIUS should not object to the deal. 

U.S. House Passes Personal Sensitive Data Related to Foreign Adversaries Act 

Sources: HR 7520 Bill, 2024.03.03 ISM Roundup 

This past month, the U.S. House of Representatives passed legislation that will prohibit data brokers from transferring U.S. residents’ sensitive personal data to foreign adversaries, including Russia, China, Iran, and North Korea. The data includes health data, precise geolocation information, biometric and genetic data, Social Security numbers, passport numbers and other government identifiers, certain financial data (including income level), certain protected class-related data, and information about minors. The Federal Trade Commission can now enforce the law and penalize data brokers for violations. This legislation comes after Biden’s Executive Order and the Department of Justice Notice of Proposed Rulemaking directing the government to establish strict protective measures against data exploitation by countries considered national security threats for U.S. sensitive personal data and U.S. government-related data. The Bill also follows the House overwhelmingly passing another bill, “the Protecting Americans from Foreign Adversary Controlled Applications Act,” which would most likely compel foreign adversary-controlled apps to turn over U.S. data. That bill may also require TikTok to divest from its parent company ByteDance in order to avoid a ban in the U.S.