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Key Takeaways
- The U.S. Department of the Treasury's Committee on Foreign Investment in the United States ("CFIUS" or the "Committee") has published its Annual Report to Congress for 2024 (the "Annual Report"), which provides important data on CFIUS' activities, including notices, declarations, mitigation, and enforcement actions through 2024.
- The Annual Report holds important insights for dealmakers contemplating foreign investor participation in investments in U.S. businesses. Potential hurdles appear throughout the data, including a robust focus on enforcement, but the overall climate reflects a relatively predictable environment for well-counseled transactions.
- The latest Annual Report is all the more intriguing in light of recent policy and case developments, including the Trump Administration's America First Investment Policy ("AFIP"), a historic divestment order, and a change of heart at the White House with respect to Nippon Steel's acquisition of U.S. Steel.
- Considering the dynamic foreign investment climate in the United States, dealmakers should evaluate CFIUS risks at the start of a transaction and develop a sophisticated strategy to navigate the CFIUS process. We can help. Below, we highlight key data and takeaways from the Annual Report that dealmakers should know.
Overview
The Committee's Annual Report should be read not in isolation, but alongside recent policy and market shifts shaping the CFIUS landscape. On the policy side, the Trump Administration's AFIP previewed a recalibration, signaling faster track consideration for allied investors and a preference for finite, concrete mitigation measures over open-ended obligations. On the market side, foreign direct investment into the United States fell roughly 14% from $176 billion in 2023 to $151 billion in 2024, contributing to the overall decline in filings.
CFIUS reviewed 325 total filings in 2024 (209 notices and 116 declarations). After adjusting for the 17 declarations that converted to notices, the net distinct filings totaled 308 – down 4% from 2023's 322 distinct filings. However, when accounting for the significant number of withdrawn and refiled notices (42 of 49 withdrawals were refiled), the actual number of unique transactions reviewed was closer to 266. The volume of withdrawn and refiled transactions (almost one out of every five submitted to CFIUS, as detailed below) is significant for the investment community as these "additional" steps can add months to the transaction timeline and may impact financing as well as closing certainty.
This represents a more significant decline than the headline numbers suggest:
- 2024: ~266 unique transactions
- 2023: ~279 unique transactions (approximately 4-6% decline)
- 2022: ~322 unique transactions (approximately 18-20% decline from peak)
The steeper year-over-year decline in actual unique deals, compared to the modest 4% decrease in gross filings, underscores the impact of foreign direct investment dropping 14% in 2024; the difference between total filings and unique transactions highlights CFIUS' continued reliance on the withdraw/refile process to manage complex reviews.
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