Business case
A multinational company was subject to an investigation by the European Commission under the Foreign Subsidies Regulation (“FSR”). The investigation assessed whether certain financing arrangements may have conferred an economic advantage on the company and whether any such advantage could potentially affect competition in European markets. The review focused on the terms and conditions of financing instruments and guarantees, as well as their potential implications from a competition perspective.
FSR investigations often require a detailed assessment of whether financing arrangements depart from market conditions and, if so, whether any resulting advantage is capable of affecting competition. Such assessments must consider financial benchmarks, commercial realities, and the broader economic context. Even where potential advantages are identified, their significance depends on their scale and their likely impact on market outcomes.
We conducted an economic and financial assessment of the company’s financing arrangements by benchmarking their terms against relevant market references and comparable transactions. We evaluated whether the financing conditions were consistent with those that could reasonably be expected under normal market circumstances and assessed the potential magnitude of any economic advantage. Our findings were used to support the legal analysis conducted in the context of the European Commission’s FSR investigation.