Lobbying | Foreign Investment | Economic Security

A signed merger agreement is no longer the finish line for a sensitive cross-border transaction. It is the opening of a second negotiation—over control, continuity, local benefit and trust. The companies that understand this do more than defend a deal. They redesign it.

By Frank Farnel | Responsible Public Affairs | September 7, 2026

Executive summary

• Foreign-investment screening has moved from specialist legal diligence to the center of corporate strategy. In 2026 the European Union adopted a stronger common framework, while the latest British and American reports show large caseloads and continuing use of mitigation agreements.
• For a sensitive acquisition, legal permission and political acceptance are related but different. A filing answers whether the transaction may proceed. A political license answers whether elected officials, workers, local communities and security institutions can live with it.
• The strongest lobbying does not try to talk a government out of a legitimate risk. It converts the transaction into a more acceptable structure: narrower control, protected data, domestic investment, operational continuity, independent oversight and credible enforcement.
• Nippon Steel’s acquisition of U.S. Steel, COSCO’s reduced stake in a Hamburg terminal, Couche-Tard’s abandoned approach to Carrefour and the forced divestment of Newport Wafer Fab illustrate four different outcomes: approval with unusually deep safeguards, negotiated narrowing, early political rejection and post-closing unwind.
• The practical task for boards is to build the political case before announcing the commercial one—and to treat post-closing compliance as part of the bargain, not an appendix to it.

The second negotiation inside every sensitive deal

Dealmakers are trained to identify the counterparty. In politically exposed transactions, that habit can be dangerously incomplete. The seller signs. The buyer pays. Yet neither side controls the question that may ultimately decide the transaction: whether the host country is prepared to let ownership change on the proposed terms.

That question is no longer confined to obvious defense assets. Screening regimes now reach semiconductors, artificial intelligence, advanced materials, energy, ports, sensitive personal data, food supply chains, research capabilities and critical suppliers. The vocabulary varies by jurisdiction, but the underlying concerns recur: Who controls the asset? What knowledge can move? What capacity could disappear? Which dependency may deepen? What leverage might a foreign government gain?

The policy landscape tightened again this summer. The Council of the European Union adopted a revised foreign-investment screening regulation on June 8, 2026. The measure requires screening mechanisms across all member states, establishes a common minimum sectoral scope and extends attention to investments made through EU entities that are ultimately controlled from outside the Union. Regulation (EU) 2026/1386 was published on June 26, entered into force on July 16 and will generally apply from January 17, 2028. [1] [2]

The latest national figures make the scale clearer. The United Kingdom received 1,324 notifications under the National Security and Investment Act during the financial year ending March 31, 2026. Of the 1,220 notified acquisitions reviewed, 54—4.4 percent—were called in, while 95.6 percent proceeded without further action. The government made nine final orders and blocked or ordered the unwind of one acquisition. [3]

In the United States, CFIUS assessed 140 declarations and accepted 207 notices in calendar year 2025. It adopted mitigation measures or conditions in connection with 25 notices—approximately 12 percent of the notices filed that year. At year-end, the committee was monitoring 234 mitigation agreements and conditions; monitoring agencies conducted 40 site visits during 2025. [4]

Those statistics should not be read as evidence that every transaction has become difficult. Most British notifications are cleared. Nor do filing totals measure lobbying. They do, however, reveal an institutional fact: ownership decisions are routinely assessed through a security lens, and conditional approval has become a durable form of economic governance.

A sensitive transaction is now negotiated twice: first with the seller over value, then with the state and its constituencies over acceptable control.

From legal clearance to political license

Corporate strategy scholarship has long distinguished the market environment from the nonmarket environment. David Baron’s influential formulation argued that business strategy must integrate both rather than treating politics as an external disturbance. Amy Hillman and Michael Hitt later distinguished transactional political action from relational engagement and examined when companies act alone or through constituencies. [5] [6]

Investment screening gives that theory unusually concrete consequences. The market case may establish price, synergies, technology and financing. It does not establish legitimacy. The public case must address a different set of interests: national capability, supply security, employment, regional development, tax base, research ecosystems, data governance, allied relationships and the state’s freedom of action in a crisis.

It is useful to call the resulting acceptance a political license to transact. This is not a legal license and it cannot substitute for formal clearance. Nor is it a public-relations gloss. It is a practical alignment between the transaction and the host country’s legitimate expectations, expressed through five tests.

The five tests of a political license

Test	The real question	Evidence that carries weight	Common failure
Asset	Why does this company, technology, site or dataset matter beyond its financial value?	Capability maps, supply-chain dependencies, customer criticality, research links, crisis functions	Treating an iconic or strategic asset as an ordinary portfolio company
Acquirer	What risks arise from the buyer’s ownership, jurisdiction, governance and external dependencies?	Beneficial ownership, government ties, compliance history, allied status, governance safeguards	Assuming that commercial reputation answers security questions
Assurance	Which risks can be reduced through a verifiable change in structure or conduct?	Protected technology, segregated networks, domestic boards, investment covenants, veto rights, audit access	Offering broad promises that cannot be monitored or enforced
Allies	Who can independently explain the transaction’s local value—and who remains unconvinced?	Workers, suppliers, customers, universities, local government and credible industry voices	Recruiting validators after opposition has already defined the deal
Aftercare	Who will honor and evidence the bargain after closing?	Named executives, compliance budgets, reporting lines, site access, escalation and remediation mechanisms	Letting the deal team disappear once the transaction completes

The model matters because it shifts lobbying away from a simple request—“approve our deal”—toward transaction design. The public-affairs function does not replace counsel, bankers or security specialists. It connects their work to the institutions and constituencies that must judge whether the proposed safeguards are believable.

Case one: Nippon Steel turned an acquisition into an industrial covenant

Nippon Steel’s pursuit of U.S. Steel is the clearest recent example of a commercial transaction being rebuilt as a political bargain. Announced in December 2023, the acquisition became entangled with national-security claims, industrial symbolism, union opposition and presidential politics. President Joe Biden prohibited the transaction on January 3, 2025. President Donald Trump ordered a de novo CFIUS review on April 7. After receiving CFIUS’s recommendation on May 21, he issued a new order on June 13: the deal remained prohibited unless the parties entered into and complied with a national security agreement materially consistent with the government’s draft. [7]

The transaction closed on June 18, 2025. Nippon Steel and U.S. Steel disclosed commitments that went far beyond conventional merger remedies. Nippon Steel committed approximately $11 billion in new U.S. investment through 2028. U.S. Steel would remain incorporated in the United States and headquartered in Pittsburgh; a majority of its directors and key management, including the chief executive, would be U.S. citizens; domestic production capacity would be maintained; and U.S. Steel would remain free to pursue trade actions under American law. [8]

The government received a non-economic golden share. The disclosed rights included appointing an independent director and presidential consent over specified matters, including reductions in committed investment, moving the headquarters, redomiciling the company, transferring production or jobs abroad and certain plant closures or idling decisions. This was not merely an improved narrative. It was a reallocation of corporate discretion.

Verified fact: the approval depended on a binding national security agreement, and the companies publicly described the investment, governance and consent rights summarized above.

Analysis: the decisive strategic shift was from arguing that foreign ownership would not harm an American company to promising that the acquisition would deliver a protected American industrial capability. That repositioning created a political vocabulary—investment, production, headquarters, jobs and national control—that officials could defend.

Open question: whether this architecture becomes a repeatable model or remains an exceptional arrangement for an iconic asset is not yet known. The degree of public control may deter some investors even as it demonstrates that ambitious mitigation can rescue a contested transaction.

Case two: Couche-Tard met a veto before it built a constituency

In January 2021, Canada’s Alimentation Couche-Tard approached Carrefour about a transaction valued at roughly €16.2 billion, or about $19.6 billion at the time. The commercial logic collided almost immediately with France’s definition of food sovereignty. Finance Minister Bruno Le Maire publicly rejected the proposal, and Couche-Tard abandoned the takeover effort only days after the talks became public. [9]

The buyer did not arrive empty-handed. According to contemporaneous reporting, the developing proposal included approximately €3 billion of investment, French representation on the board, strategic operations retained in France, dual listings in Paris and Toronto and a co-chief-executive structure. Carrefour management reportedly supported the combination. Yet the offers came after the transaction had already been framed as a threat to food security, employment and national control. Carrefour employed about 105,000 people in France and was the country’s largest private-sector employer.

Verified fact: the French government publicly opposed the transaction on food-security grounds, the companies ended takeover discussions and the proposed safeguards did not secure a change in the government’s position.

Analysis: the case illustrates the limits of late-stage lobbying. Once an asset becomes a symbol of sovereignty—especially during a health crisis—financial assurances are judged against a much larger political story. The buyer was negotiating terms while the government was defending a boundary.

Caution: it would be too simple to say that better public affairs would necessarily have delivered approval. Governments can reject transactions for substantive or political reasons that no campaign can remove. The lesson is narrower: a company should discover the host country’s non-negotiable concerns before allowing the transaction to become a public fait accompli.

Case three: Hamburg reduced ownership to preserve operational control

COSCO Shipping Ports originally sought a 35 percent interest in Container Terminal Tollerort in Hamburg. After an extended German debate about critical infrastructure and dependence on China, the transaction proceeded in June 2023 at 24.99 percent. HHLA, the terminal’s parent company, retained control. Its public explanation emphasized that the city continued to own the port infrastructure, COSCO received no exclusivity, and strategic know-how, sales data and IT systems remained under HHLA’s responsibility. [10]

HHLA’s 2025 annual reporting confirms that COSCO continued to hold the 24.9 percent stake. The investment therefore survived, but in a form calibrated to a political and legal threshold: a non-controlling interest, narrower rights and explicit separation from data and strategic control. [11]

Verified fact: the proposed stake was reduced, the deal closed at 24.99 percent, and the company disclosed restrictions on control, exclusivity and information access.

Analysis: this was neither a full political victory nor a straightforward defeat. It was transaction redesign. The investor preserved a commercial foothold; the host retained control over the sensitive functions. For lobbyists, the relevant skill was not louder advocacy but the ability to identify which rights were commercially useful and which created intolerable political exposure.

Case four: Newport Wafer Fab shows that closing does not end the risk

Nexperia acquired an additional 86 percent of Newport Wafer Fab on July 5, 2021, taking its ownership to 100 percent. In November 2022, the British government used the National Security and Investment Act to require Nexperia to sell at least 86 percent. The published order cited risks relating to compound-semiconductor technology and know-how, as well as the site’s position within the South Wales semiconductor cluster. [12]

The case is important precisely because the acquisition had already occurred. National-security review can be retrospective, and a completed transaction can be unwound. Commercial integration, sunk costs and public commitments do not eliminate the state’s concern if it concludes that ownership creates an unacceptable capability or access risk.

Verified fact: the final order required divestment of at least 86 percent and identified technology, know-how and cluster access as the relevant risks.

Analysis: some risks cannot be solved by an employment pledge or a new communications campaign. When the concern is access to sensitive expertise or the future direction of a strategic cluster, the remedy must alter ownership, control, information access or all three. Public affairs can help decision-makers understand facts and alternatives; it cannot make a structurally inadequate remedy adequate.

What the cases reveal

National benefit must be specific enough to audit

“We support jobs” is a slogan. A named capital program, protected production capacity, a headquarters covenant, a domestic management requirement or a defined research partnership is an assurance. Governments have learned to distinguish them. So have unions, legislators and investigative journalists.

Control matters more than the percentage headline

A minority stake may still carry board rights, information access, vetoes or operational influence. Conversely, a larger investment may become acceptable if sensitive functions are ring-fenced and overseen. The serious lobbying brief therefore begins with a rights map, not a shareholding percentage.

An ally must have an interest of its own

Local leaders, suppliers, universities and workforce representatives are credible when their support rests on a demonstrable benefit they can explain in their own words. Scripted endorsements are brittle. They collapse under the first detailed question and can damage both the supporter and the company.

Political support cannot cure a legal defect

The strongest constituency will not neutralize classified intelligence, prohibited access or an unmitigable technology-transfer risk. Ethical lobbying clarifies trade-offs and tests remedies; it does not pressure officials to disregard evidence or bypass statutory criteria.

The bargain continues after closing

CFIUS’s 234 monitored agreements and 40 site visits in 2025 are a useful corrective to deal-closing culture. A mitigation agreement creates an operating model: controlled access, segregated networks, approved personnel, security committees, audit rights, reporting and remediation. Failure can reopen risk years after the press release is forgotten.

A balanced view: security is real, but so is politicization

Companies sometimes speak of national security as though it were a convenient pretext for protectionism. Governments sometimes invoke it with definitions so broad that predictability suffers. Both concerns deserve attention.

The OECD’s benchmark principles for national-security investment policy—non-discrimination, transparency, predictability, proportionality and accountability—remain relevant because an open-ended security exception can chill beneficial capital and invite political favoritism. Its more recent work also recognizes that investment screening has become the most common tool among OECD countries for managing security implications linked to foreign investment. [13] [14]

Lobbyists must be able to hold two ideas at once. A government can have a legitimate security concern. The review process can also become politicized, inconsistent or strategically selective. The right response is neither deference without scrutiny nor indignation without evidence. It is a disciplined case that separates genuine vulnerability from economic symbolism, offers proportionate safeguards and records how the public interest will be protected.

What leaders should do now

1. Run a sovereignty review before signing. Identify not only formal filing triggers but the asset’s place in employment, technology, infrastructure, food, health, data and regional narratives.
2. Put public affairs inside the deal team. Government relations, legal, security, communications, tax, operations and M&A should share one fact base and one decision calendar from the start.
3. Map rights, not just ownership. Show precisely who will control data, technology, production, appointments, capital allocation, procurement, closures and crisis decisions after closing.
4. Design remedies early. Test alternative stakes, governance structures, ring-fencing, domestic incorporation, local investment and independent monitoring before officials demand them under deadline pressure.
5. Build local value that survives scrutiny. Quantify investment, skills, supplier spending, research capacity and production continuity. State assumptions and avoid commissioned estimates that cannot be independently explained.
6. Engage opponents as sources of intelligence. A union, ministry, security agency or regional competitor may reveal the decisive concern before it becomes a public veto point.
7. Keep diplomatic channels aligned. Cross-border deals can involve the home government, host government, allied embassies and subnational authorities. Their interventions should clarify rather than contradict the corporate case.
8. Plan the post-close institution. Name the accountable executive, fund the compliance function, preserve audit trails and ensure the board receives reports on every continuing undertaking.

Key evidence

• EU: Regulation (EU) 2026/1386 entered into force on July 16, 2026 and will generally apply from January 17, 2028, requiring more consistent screening across all member states. Source.
• United Kingdom: 1,324 notifications were received in FY 2025–26; 4.4 percent of 1,220 reviewed notified acquisitions were called in, and one acquisition was blocked or ordered unwound. Source.
• United States: CFIUS adopted mitigation measures or conditions in connection with 25 notices filed in 2025, about 12 percent of that year’s notices. Source.
• Continuing oversight: CFIUS was monitoring 234 mitigation agreements and conditions at the end of 2025 and conducted 40 site visits during the year. Source.
• U.S. Steel: the disclosed national security agreement included approximately $11 billion in new investment through 2028 and government consent rights over specified corporate decisions. Source.

Executive decision checklist

Board question	Evidence required before announcement	Red flag
What will government believe it is losing?	Asset and capability assessment	The answer is limited to financial ownership
Which concern is non-negotiable?	Jurisdiction-specific stakeholder interviews and legal analysis	All objections are labeled “political”
Can the risk be designed out?	Alternative control, data, governance and operating structures	The only proposed remedy is a public pledge
Who benefits locally?	Auditable investment, workforce, supplier and capability commitments	Benefits rely on opaque multiplier estimates
Who can speak credibly?	Independent stakeholders with a genuine interest	Support exists only in paid channels
Who owns compliance after closing?	Named executive, board committee, budget and reporting calendar	No owner beyond the transaction team

Conclusion: lobbying as transaction architecture

The old sequence—agree the deal, announce it, file the paperwork, then mobilize government relations when trouble appears—is increasingly untenable. By the time opposition is visible, the most powerful frame may already be fixed: foreign control, lost capacity, exposed data, vulnerable workers or strategic dependence.

Effective lobbying begins earlier and asks harder questions. What public capability sits inside this private asset? Which form of control creates the risk? What benefit will remain in the host country when the market turns? Which promises can be enforced? Who will still be accountable five years after closing?

The best answer may be approval. It may be a smaller stake, a different governance structure, a ring-fenced technology, a substantial local investment or an honest decision not to proceed. That is the central lesson of investment screening: influence is not measured by whether the original term sheet survives. It is measured by whether a commercially rational transaction can be reconciled with a defensible public interest.

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Glossary

Call-in: A government decision to subject a transaction to a full national-security assessment, including transactions that were not voluntarily notified.

CFIUS The Committee on Foreign Investment in the United States, an interagency body that reviews certain foreign investments for national-security risk.

FDI screening Government review of foreign direct investment to identify, assess and, where necessary, mitigate risks to security or public order.

Golden share A special share carrying defined governance or consent rights without necessarily giving the holder an ordinary economic interest.

Mitigation agreement A binding arrangement that imposes safeguards—such as access controls, domestic governance, monitoring or operational commitments—to address identified risk.

Political license The article’s analytical term for the broader acceptance required from public institutions and legitimate constituencies in addition to formal legal clearance.

Safe harbor In the CFIUS context, protection against a transaction being reviewed again after CFIUS concludes action, subject to specified exceptions such as misstatements or breaches.

References and further reading

Official and primary sources

1. Council of the European Union, “Foreign investment screening: Council signs off on updated framework,” June 8, 2026. Direct link.
2. European Union, Regulation (EU) 2026/1386 on the screening of foreign investments in the Union, Official Journal of the European Union, June 26, 2026. Direct link.
3. UK Cabinet Office, National Security and Investment Act 2021: Annual Report 2025–26, July 14, 2026. Direct link.
4. Committee on Foreign Investment in the United States, Annual Report to Congress for Calendar Year 2025, U.S. Department of the Treasury, August 2026. Direct link.
5. The White House, “Regarding the Proposed Acquisition of the United States Steel Corporation by Nippon Steel Corporation,” presidential order, June 13, 2025. Direct link.
6. Nippon Steel Corporation and United States Steel Corporation, “Nippon Steel Corporation and U. S. Steel Finalize Historic Partnership,” June 18, 2025. Direct link.
7. UK Department for Business, Energy and Industrial Strategy, Newport Wafer Fab: Notice of Final Order, November 16, 2022. Direct link.
8. Hamburger Hafen und Logistik AG, “COSCO Investment in HHLA Container Terminal Tollerort,” corporate fact file, consulted September 7, 2026. Direct link.
9. Hamburger Hafen und Logistik AG, Annual Report 2025: Combined Management Report, 2026. Direct link.

Institutional and academic sources

10. OECD, “Managing Security Implications of International Investment,” in Economic Security in a Changing World, September 11, 2025. Direct link.
11. OECD, Guidelines for Recipient Country Investment Policies Relating to National Security, OECD/LEGAL/0372, adopted 2009. Direct link.
12. David P. Baron, “Integrated Strategy: Market and Nonmarket Components,” California Management Review, Vol. 37, No. 2, 1995, pp. 47–65. DOI.
13. Amy J. Hillman and Michael A. Hitt, “Corporate Political Strategy Formulation: A Model of Approach, Participation, and Strategy Decisions,” Academy of Management Review, Vol. 24, No. 4, October 1999, pp. 825–842. DOI.

Authoritative case reporting

14. Reuters, “Canada’s Couche-Tard drops $20 billion Carrefour takeover plan after French government opposition,” January 16, 2021. Direct link.
15. Reuters, “Nippon Steel’s purchase of U.S. Steel closes, with big role for Trump,” June 18, 2025. Direct link.

Source and methodology note

Research was completed on September 7, 2026, with a cut-off of 8:00 a.m. Central European Summer Time. The article prioritizes legislation, executive orders, statutory reports, published final orders and corporate materials describing binding transaction terms. Reuters was consulted for the Couche-Tard/Carrefour sequence and the reported transaction values because no final regulatory order was issued before the parties ended their discussions.

Official screening reports describe reviewed cases but protect confidential transaction information. Aggregate filing, mitigation and withdrawal statistics therefore show institutional activity, not the private lobbying undertaken in individual reviews. Corporate claims about projected jobs and economic impact are identified as company claims and are not treated as independently verified outcomes. The “political license” and five-test model are the author’s analytical framework; the dates, figures, decisions and disclosed commitments are sourced facts.

Suggested internal links

• Public Affairs vs. Lobbying: What Corporate Leaders Need to Know — link from the discussion of legal clearance versus broader legitimacy.
• Business Diplomacy vs. Government Relations: Key Differences — link from the section on aligning corporate and diplomatic channels.
• When Lobbying Crosses Borders — link from the discussion of foreign principals and cross-border transparency.
• The Strategic Role of Public Affairs in Shaping Government Policies — link from the explanation of integrated nonmarket strategy.

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