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On 16 October 2025, the European Commission ("Commission"), together with the EU High Representative for Foreign Affairs and Security Policy, published the "Defence Readiness Roadmap 2030" (the "EU Roadmap"). The EU Roadmap sets out objectives for strengthening Europe's defence posture over the next five years. Among the key measures, the Commission reaffirmed its readiness to provide competition guidance on cooperation projects in the defence sector and signalled a possible modernisation of the State aid framework for defence.
This follows the Competition and Markets Authority (the "CMA") publishing the "Scale-ups and Competition Policy Discussion Paper" (the "UK Discussion Paper") in September 2025, where it considers the role of competition policy in assisting business in the UK.
These developments come at a time of unprecedented investment and collaboration across the European defence sector, as states seek to address evolving threats and capability gaps. The following analyses the implications for industry stakeholders across the EU and UK and how our firm's Defence Practice in Competition, Regulation and Trade can support clients in this fast-evolving regulatory landscape.
1. Where do we currently stand?
On 17 June 2025, the Commission unveiled the Defence Readiness Omnibus (the "Omnibus"), which sets out a package to facilitate up to EUR 800 billion in defence investments by 2030, supporting public and private finance for defence projects. The Omnibus seeks to remove obstacles in areas such as public procurement, permitting procedures, reporting requirements, and cross-border cooperation. The Omnibus concerns a broad spectrum of regulatory matters. Measures include simplification proposals and guidance relating to EU funding, competition law, chemicals and environmental regulation, ESG requirements, and the EU Working Time Directive.
Set against that background, the EU Roadmap aims to improve the Union's capacity to anticipate, prepare and respond to crises. It encourages Member States to form capability coalitions to close the existing critical capability shortfalls in areas such as air and missile defence, military mobility, artillery, cyber, AI and drones, and identifies a set of four initial Readiness Flagship Projects of European scope.
In a similar push, the UK has committed to increase defence spending to reach 2.6% of GDP by 2027, with an ambition to eventually reach 5% by 2035.
In June 2025, the UK Ministry of Defence published its Strategic Defence Review, representing a significant overhaul of UK defence policy. It responds to a new era of threat marked by growing nuclear risks, cyber-attacks and hybrid threats and rapid technological change in warfare (including the use of drones and AI). As a direct implementation of the Strategic Defence Review's modernisation agenda, in the same month the UK government announced a GBP 5 billion technology investment. The Ministry of Defence's "Defence Industrial Strategy" document, published in September 2025, operationalises the Strategic Defence Review, detailing how the industry will deliver these goals.
2. Key Legal Implications for Competition Policy
The Omnibus and EU Roadmap signal an inflection of the Commission's positions in terms of merger control, competition law, and State aid. They mark a first step toward a more harmonised approach to defence-related cases. The UK Discussion Paper is broader in scope but considers the relationship between competition policy and business in the context of a defence sector investment push.
Merger Control / Antitrust Guidance for Defence Cooperation
The EU Roadmap and UK Discussion Paper both aim to unlock horizontal enablers to achieve large scale production, create economies of scale and innovation.
Historically, defence cooperation has faced legal uncertainty due to the strictures of UK and EU competition rules. However, the urgent need for joint procurement, interoperability, and innovation in defence capabilities has prompted calls for tailored guidance.
In merger control, the role of defence considerations in balancing potential detrimental effects on competition remains unclear. So far there is no framework for evaluating specifically defence-related cooperation.
In the Omnibus, the Commission has committed to giving adequate weight to the changed security and defence environment in its review of the EU merger guidelines, a first draft of which is expected in the spring of 2026. This may in particular signal a more positive stance toward efficiency claims in defence-related merger control cases.
The Omnibus also indicates that the Commission is prepared to offer antitrust guidance for cooperation projects in the defence sector. This applies in particular to cases where joint efforts are needed to expand production or where companies cannot develop or manufacture products alone. In evaluating such agreements, the Commission intends to take into account the efficiencies created, including contributions to defence readiness and supply chain resilience. Overall, the Omnibus maintains the existing antitrust framework but reflects a more open attitude toward defence-related cooperation.
This provides companies with broader legal and policy options to pursue joint initiatives, especially those focused on scaling production and strengthening supply chains. The UK Discussion Paper also alludes to the potential development of sector-specific guidelines to facilitate cooperation.
EU State Aid Framework
Substantial public and private investment are essential for industry scale-up to reach the EU defence readiness 2030 objective.
Private equity firms are ramping up European defence investments, a sector they had historically stayed away from, to align with the current geopolitical environment and national objectives.
In parallel, the Commission is assessing whether to modernise its approach to State aid in the defence sector to allow Member States to support strategic defence projects. Modernised State aid rules could provide greater flexibility for national and transnational investments, particularly those involving disruptive technologies and critical raw materials.
Any modernisation of the State aid framework will be required to balance the need for rapid industrial scale-up with the principles of transparency, proportionality, and non-distortion of competition. The Commission may consider sector-specific exemptions or streamlined procedures for defence-related projects, especially those aligned with the EU Roadmap's priority capability areas.
3. What are the next steps?
The Commission's Omnibus and EU Roadmap are the first step in a broader process of engagement with industry and governments. They set out clear objectives for joint procurement, capability development, and industrial innovation. The UK Discussion Paper is a framework through which to consider the British government's momentum around defence spending and its investment strategy.
Guidance on competition law and State aid will be critical to achieving the objectives set by EU Member States and the UK and to ensuring that Europe's defence industry is equipped to meet the challenges of the next decade. Stakeholders should monitor forthcoming guidance and participate in consultations to ensure that new rules and frameworks reflect operational realities and strategic needs.
Industry stakeholders should expect the Commission and CMA to clarify the boundaries of permissible cooperation, particularly in relation to joint procurement, R&D, and supply chain integration. Guidance may also address the treatment of consortia, information sharing, and standard-setting activities, with a view to promoting innovation and resilience without undermining market competition.
4. How can our firm help?
Our firm´s Competition/Antitrust, Regulation and Trade practice includes defence sector specialists who are uniquely positioned to advise clients on the full spectrum of legal and regulatory issues arising from defence-related cooperation. Specifically, our team offers:
- Strategic Antitrust Advice: Guidance (including alignment with regulators) on structuring cooperation agreements, joint procurement, and consortia to ensure compliance with EU and UK competition law.
- Merger Control and Foreign Direct Investment Advice: Guidance on the Commission's upcoming new merger guidelines and general support in defence-related mergers in front of the Commission, CMA and other national authorities, as well as FDI filings which are often required even for minority stakes in defence-related businesses.
- State Aid and Funding Solutions: Support in navigating the evolving State aid framework, securing public funding, and leveraging EU instruments for defence innovation.
- Regulatory Advocacy: Representation of company/industry interests in consultations lead by the Commission, CMA and other national authorities, ensuring your key preoccupations are reflected in new guidance and policy developments.
- Sector-Specific Expertise: Deep understanding of defence industry dynamics, including dual-use technologies, supply chain integration, and cross-border collaboration.
As the EU and UK move towards greater defence readiness and industrial integration, our cross-border team stands ready to support clients in seizing opportunities and mitigating risks in this rapidly changing environment.
For tailored advice or to discuss how these developments may impact your organisation, please contact our firm's defence sector specialists.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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