Cross-border technology M&A: global opportunity, local legal risk

There are some incredibly compelling deal scenarios designed to exploit global arbitrage opportunities across several sectors. For example, Europe’s automotive sector currently faces considerable asset utilization issues, while Chinese manufacturers struggle with meeting demand. Technology now underpins the sector — both in product and process — and is adaptable across jurisdictions. But geopolitical considerations and regulation create a huge potential barrier to deals.

Why technology is expanding cross-border deal opportunities

More broadly, software, digital infrastructure and specialist talent are rarely confined neatly within one jurisdiction. Every digital transition – from standardized operating systems to the web, cloud and apps – has been predicated on a universal approach to tech. Tech talent is global, its infrastructure readily shared between regions.

It’s not surprising, then, that that most technology sector M&A transactions now have some international angle. London Stock Exchange Group (LSEG) reports that technology accounted for 33% of global M&A transactions in the first two months of 2026. The use of the same tech by companies the world over also massively boosts the viability of cross-border deals in every sector. And AI now means localization issues (such as language differences) are more easily managed.

But global tech dealmaking is legally complex. Employment terms may be written in one jurisdiction but enforced in another. Restrictive covenant rules vary sharply between countries. Data-use rights and localization expectations differ. Works councils, foreign investment regimes, merger-control practices and AI rules create a patchwork that can materially affect timeline, structure and integration.

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Foreign investment and national security screening

National security concerns are increasingly affecting a broad swathe of deals where even underlying technology might be considered ‘sensitive’. The European Commission says notifications to the EU’s FDI cooperation mechanism have increased by 15% since 2021, reflecting a steadily more interventionist approach to investment screening. It’s a global trend.

The UK Government, for instance, asserts its right to “scrutinize and intervene in acquisitions made by anyone, including businesses and investors, that could harm the UK’s national security... unwind it or if necessary, block it completely...” Versarien’s planned sale of graphene related assets to a Chinese-linked joint venture in 2025 was blocked on security grounds, for example, citing IP and know-how with possible dual-use applications.

But many larger deals now face regulatory clearance from a number of jurisdictions – some with alignments around key goals, others diametrically opposed. These are most obvious within the tech sector itself – Broadcom’s acquisition of VMware facing significant challenges from EU, US and Chinese regulators, for example – but tech components in out-of-sector deals are clearly a factor too.

Governments are intervening most aggressively where the target touches one of four things: critical infrastructure; defense-adjacent or dual-use technology; sensitive data; or nationally symbolic industrial capacity. The legal tool varies by jurisdiction – we have The Committee on Foreign Investment in the United States (CFIUS), the UK National Security and Investment Act 2021, FDI screening in the EU, plus golden-power rules in some member states – but the effect is similar: delay, remedies, forced divestment, or outright prohibition.

That has several practical legal consequences. First, cross-border deals with a tech consideration require earlier coordination across specialist teams. Employment, IP, data, regulatory and corporate lawyers all need to be aligned around the actual sources of value and risk. Firms with a global footprint and local tech expertise have become essential even on relatively modest deals.

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Coordinating multi-jurisdictional regulatory reviews

That’s one reason Eversheds Sutherland developed DealSCREEN. “It’s our online tool to help us assess intervention risk in different jurisdictions on merger control, FDI and FSR”, says Marjolein De Backer, Partner, Eversheds Sutherland in Brussels, and an expert on competition law. “Technology makes accessing those different resources easier, speeds up that process and helps you identify more issues.”

Second, due diligence has to focus on portability: not just whether a target owns an asset or employs a person, but whether those rights and relationships can survive transfer, integration or international operation on the buyer’s intended model.

Third, document harmonization matters more in repeat programs. Unsurprisingly, there are growing efforts to use common core documents across multiple jurisdictions where local differences mean the final 10% still changes significantly.

The EU framework for investment screening is expressly designed to deal with the fact that investments in one member state may create risks for security or public order across the Union.27 In that environment, legal advisers increasingly need to run cross-border deals as exercises in multi-jurisdictional risk orchestration rather than simple jurisdiction-by-jurisdiction filings. Technology can help with the legwork, but judgment still matters where the rules are changing or politically inflected.

And, like the technology itself, the cross-border regulatory framework is subject to rapid shifts. “Governments are changing the rules because they have evolving policy concerns and they want to make sure regulators are applying them when they look at M&A,” says De Backer. “So you’ve got to know the regulator and the different considerations they need to take into account.

“We analyzed this in DealSCREEN, and if you look at them in the last two years, 91% of the jurisdictions we cover are in some way changing their regulatory regimes to do with M&A. And in some cases, there are multiple changes.”

Technology, then, widens the cross-border opportunity because it makes more assets globally relevant. But it also hardens legal borders around data, talent, infrastructure and strategic technologies. Legal advice must help clients navigate both effects at once.

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