July 11, 2023
Foreign Investment Watch
Despite political tensions between Washington, DC and Beijing, on July 5 in a deal worth $1 billion, Moderna signed a memorandum of understanding, plus a land collaboration agreement, to identify opportunities to research, develop and manufacture mRNA medicines in China.
According to Foreign Investment Watch, Moderna’s investment creates a unique opportunity to conduct a real-time case study on outbound foreign investment reviews, and invited Partner Shannon Reaves to join industry experts to discuss whether the deal would have triggered scrutiny by U.S. regulators had an outbound investment review regime been in place, and — more importantly — whether even the slight risk of scrutiny could have triggered added time and costs for Moderna.
Shannon says, “Following the COVID pandemic, any $1 billion investment by any U.S. vaccine company in China is certain to be reviewed under any outbound investment scheme,” which, according to Shannon is partially due to Moderna’s statement that medicines under the agreement would be exclusively used for the Chinese population, and would not be exported.
He continues, “The implications for U.S. national security of this U.S. investment in China could be huge if it locks up the development of critical life-saving technologies and bars their export to the U.S. and other countries. “There is no question that a similar foreign investment in the U.S. health care sector would get close scrutiny from CFIUS.”
Even the risk of additional scrutiny would have added complexity and costs to the transaction. Shannon acknowledges that even the specter of scrutiny would add costs and labor, telling Foreign Investment Watch, “Even if the perceived risk is low, when there is a regulatory regime in place that presents any risk that a $1B deal could be delayed or restructured, it will add ‘deal friction’ and added costs for legal review.”
Read more. (Subscription Required)
July 11, 2023
Foreign Investment Watch
Despite political tensions between Washington, DC and Beijing, on July 5 in a deal worth $1 billion, Moderna signed a memorandum of understanding, plus a land collaboration agreement, to identify opportunities to research, develop and manufacture mRNA medicines in China.
According to Foreign Investment Watch, Moderna’s investment creates a unique opportunity to conduct a real-time case study on outbound foreign investment reviews, and invited Partner Shannon Reaves to join industry experts to discuss whether the deal would have triggered scrutiny by U.S. regulators had an outbound investment review regime been in place, and — more importantly — whether even the slight risk of scrutiny could have triggered added time and costs for Moderna.
Shannon says, “Following the COVID pandemic, any $1 billion investment by any U.S. vaccine company in China is certain to be reviewed under any outbound investment scheme,” which, according to Shannon is partially due to Moderna’s statement that medicines under the agreement would be exclusively used for the Chinese population, and would not be exported.
He continues, “The implications for U.S. national security of this U.S. investment in China could be huge if it locks up the development of critical life-saving technologies and bars their export to the U.S. and other countries. “There is no question that a similar foreign investment in the U.S. health care sector would get close scrutiny from CFIUS.”
Even the risk of additional scrutiny would have added complexity and costs to the transaction. Shannon acknowledges that even the specter of scrutiny would add costs and labor, telling Foreign Investment Watch, “Even if the perceived risk is low, when there is a regulatory regime in place that presents any risk that a $1B deal could be delayed or restructured, it will add ‘deal friction’ and added costs for legal review.”
Read more. (Subscription Required)
