BLOMSTEIN has kicked-off a series of briefings on current legal topics in the defence sector. In our last briefing, we discussed our take on how to get direct awards. Today, we focus on the recent merger clearance of the German Federal Cartel Office (FCO) for the acquisition of ESG Elektroniksystem- und Logistik-GmbH by Hensoldt Holding Germany GmbH. This merger clearance underscores a pivotal moment in defence industry consolidation. The merger is set against a backdrop of geopolitical shifts and heightened defence investment. ESG's expertise as a system integrator focused on the development, integration, and support of third-party electronic systems complements Hensoldt, a leading manufacturer of defence electronics, including radars and optoelectronic systems. This briefing explores the antitrust law implications and the unique characteristics of the defence market, particularly in the context of the current geopolitical climate marked by the urgency of strengthening defence capabilities through innovation and investment and the rapid digitalization of the battlefield.

As announced mid-January, BLOMSTEIN is publishing a series of briefings introducing into European and German legal defence matters. In our last briefing, we discussed our take on hot legal topics for the defence industry for the year 2024.

As announced last week, BLOMSTEIN is publishing a series of briefings introducing into European and German legal defence matters. In preparation for the new year, our defence team got together and identified the topics that we believe will be relevant for companies in the security and defence industry in the EU and Germany in international trade law, ESG, antitrust law and public procurement law:

The Russian invasion of Ukraine has not only turned the European security architecture upside down. It has also triggered a massive and ongoing rethink of security and defence within the European Union as a whole and its Member States individually. With conflicts flaring up in the Middle East and the future of peace in the Far East uncertain, Europe now faces a host of additional challenges for its foreign and security policy, as well as controversial decisions about meaningful consequences for its internal defence and security industries. The impact will be felt not only by the EU and its Member States, but also by any defence company operating or wishing to operate in the EU market.

In Summer 2023, the Act in Support of Ammunition Production (ASAP) was adopted. ASAP marks the final stage of a three-track plan for the delivery and joint procurement of ammunition for Ukraine. While the first two tracks concerned the intended supply of 1 million rounds of stock ammunition to the Ukraine (track 1) and the promotion of joint procurement by EU member states (track 2), ASAP aims to strengthen the supply-side by increasing the European defense industry’s production capacities of ammunition and missiles (track 3). In contrast to the first two tracks, which responded to an immediate need for military supply following the Russian invasion of Ukraine, ASAP focuses on longer-term objectives.

On August 9, 2023, the President of the United States, Joe Biden, signed an Executive Order on Addressing United States Investments In Certain National Security Technologies And Products In Countries Of Concern. The Executive Order is the first step towards a so-called outbound investment control, which is to complement the export control and inbound investment control of the U.S. Can the U.S. outbound investment control serve as a model for the EU?

BLOMSTEIN advised Helsing, as it did on the previous Series A financing 2021, together with YPOG on the recent Series B financing round with a total volume of EUR 209 million. BLOMSTEIN supported with regard to investment control law. A big thank you goes to Helsing as well as to the entire YPOG team for the trust placed in us!

The Russian invasion of Ukraine has led to a rethink in Germany. Suddenly, extensive funds are to be made available with which the urgently needed equipping of the German Armed Forces can finally be realised. The equipment is now to be provided as quickly as possible. The first procurement actions have already been initiated.

Strengthening cooperation in defence and security procurement among member States has become an important concern of the European Union. Last year, the Commission addressed the issue of joint procurement in the defence and security sector in a separate guidance note. The Commission stressed the need for more cooperation in order to reduce costs, promote cross-border competition and facilitate cooperation between the European armed forces. In particular due to PESCO and the EDF, more joint procurement procedures are to be expected.

The latest edition of the journal of export controls and sanctions WorldECR has just been released. BLOMSTEIN lawyers Florian Wolf and Leonard von Rummel have contributed an article about the Franco-German military cooperation with regard to export control matters.