What Is Driving the Transformation of the M&A Landscape
Mobility is no longer demanded as an isolated product but as an integrated service: vehicle usage, charging infrastructure, car sharing, public transport and parking are merging into a single, digitally orchestrated customer journey. The key drivers of this development are the digitalisation of vehicles and infrastructure, changing usage patterns and the political imperative of decarbonisation through the European Green Deal (the EU’s overarching strategy for achieving climate neutrality by 2050) and the EU’s “Fit for 55” legislative package (a comprehensive set of legislative measures aimed at reducing net greenhouse gas emissions by at least 55% by 2030, including tightened CO2 fleet standards, the extension of the EU Emissions Trading System to road transport and the Alternative Fuels Infrastructure Regulation). As a result, mobility is evolving into a platform on which physical infrastructure, software, data and subscription services are inextricably linked. This shift is not merely a technological transition but triggers a fundamental restructuring process that is placing the legal architecture of the industry under considerable strain across the entire European Union.
Original equipment manufacturers (OEMs) are acquiring ridesharing platforms or taking stakes in Mobility-as-a-Service (MaaS) providers. Rail operators are investing in ticketing software or airport groups are purchasing parking mobility service providers. The industry is consolidating across traditional sector boundaries. At the same time, established value chain participants are coming under existential pressure when Tier-1 suppliers are struggling with transformation costs, bus operators with the green transport transition, and airlines with the lingering aftermath of the pandemic.
The current geopolitical landscape is exacerbating an already strained situation in the European mobility sector. Armed conflicts, trade disputes and the growing fragmentation of global supply chains are creating an investment climate characterised by uncertainty and restraint. Moreover, cross-border M&A transactions in the mobility sector are increasingly complicated by tightened foreign direct investment screening both under the EU FDI Screening Regulation (Regulation (EU) 2019/452) and divergent national screening regimes across Member States as well as export control restrictions, including licensing requirements for dual-use technologies such as autonomous driving systems or battery cell technology.
For companies, this means that strategic acquisition decisions must be taken under heightened uncertainty, with correspondingly greater demands on legal safeguards such as Material Adverse Change clauses (MAC clauses) or flexible withdrawal rights.
M&A Strategies in the Mobility Ecosystem: Transaction Structures and Their Legal Pitfalls
The acquisition strategy of leading OEMs follows the clear industrial logic that anyone seeking to remain competitive in the age of connected mobility must control ecosystems. OEMs are not acquiring companies for their own sake but are acquiring data access, customer interfaces and platform architecture.
From a legal perspective, this gives rise to complex transaction structures. Full acquisitions (share deals) are only considered where complete control over technology and data assets is sought. More commonly, the market sees joint venture structures, strategic minority investments or framework cooperation agreements with option rights since the market is volatile, valuations uncertain, and the regulatory environment increasingly restrictive.
A further source of uncertainty stems from the rapid advancement of artificial intelligence. AI-driven business models are difficult to capture using traditional valuation methodologies, while established business models risk significant devaluation through AI-driven disruption. The resulting divergence between buyer and seller expectations materially complicates purchase price determination and increasingly leads to the adoption of earn-out structures, contingent purchase price components or valuation adjustment mechanisms.
Transaction structures are particularly demanding in the areas of public transport and charging infrastructure, where public and private interests intersect. Public-Private Partnerships (PPPs) mobilise private capital for infrastructure but in practice generate considerable potential for conflict. Whilst private investors think in return cycles, public authorities think in political mandate periods. Since these diverging time horizons can lead to conflicts of interest in the event of a change of control or regulatory shifts, change-of-control provisions and termination rights should be precisely drafted from the outset. Across the EU, the legal frameworks governing PPPs vary significantly between Member States, adding a further layer of complexity to cross-border infrastructure transactions.
Competition Law Scrutiny in Platform-Based Markets
The competition law assessment of platform-based mobility markets poses new challenges to traditional market definition concepts. When an OEM acquires a ridesharing platform, it is unclear whether the vehicle manufacturing, passenger transport or data market is affected. The increasing multi-jurisdictional scrutiny by the European Commission under the EU Merger Regulation and by national competition authorities extends transaction timelines and jeopardises closing conditions. In the areas of charging infrastructure and interoperable ticketing systems, de facto monopoly tendencies are emerging that are already on the radar of the authorities. State aid rules, obligations to provide non-discriminatory infrastructure access (open access requirements) and potential behavioural remedies should be factored into the due diligence process from the outset.
Crisis Hotspots: Suppliers, Public Transport Operators and Aviation
The crisis dynamics in the European mobility sector can be described along three central patterns: technology-driven revenue decline, structural investment pressure and the long-term consequences of external shocks.
The technological disruption first hits those players whose business models are built on legacy technologies. This is most visible at the Tier-1 supplier level where the electrification of the powertrain is destroying revenues in traditionally high-margin product lines such as injection pumps, transmission components or exhaust aftertreatment while simultaneously requiring massive investment in software, battery management systems and sensor technology. Several prominent Tier-1 companies across Europe have already undergone restructuring or formal insolvency proceedings under their respective national frameworks.
Structural investment pressure is equally intense in public transport where the transition to zero-emission drivetrains requires billions in investment in new vehicle fleets and charging infrastructure, while supply bottlenecks, volatile procurement prices and the absence of viable economic models are hampering implementation. Private bus operators and municipal carriers without sufficient public backing face the stark choice to invest or exit the market.
The third crisis dimension, the long-term consequences of external shocks, is most clearly visible in the aviation industry, which continues to bear structural scars of the COVID-19 pandemic. State aid amounting to billions of euros stabilised numerous carriers in the short term but simultaneously preserved competition-distorting structures. This pattern of state intervention runs through the entire European mobility sector. Member State governments are subsidising the green transformation of suppliers, propping up ailing companies with capital injections and assembling rescue packages for airlines and thereby increasingly intervening in the competitive structures of the internal market. For companies considering acquisitions of distressed competitors or infrastructure providers in this environment, attractive entry opportunities arise which at the same time gives rise to significant hidden risks such as inherited legacy liabilities, environmental remediation obligations or ongoing obligations to repay State aid.
Liability Risks for Directors and Officers: The Underestimated Factor
In this environment of structural instability, the question of liability moves to the foreground on two distinct levels: the liability of the company itself and the personal liability of its directors and officers.
At the corporate level, liability risks arise in particular from the acquisition of target companies with existing compliance deficits in the form of antitrust fines imposed by the European Commission or national competition authorities, environmental remediation obligations under national transpositions of the Environmental Liability Directive, State aid recovery orders by the European Commission or tax reassessments, all of which may pass to the acquirer unless specifically excluded in the transaction documentation. In PPP structures, inadequately drafted change-of-control provisions and termination rights may enable the public partner to claim contractual penalties or terminate the contractual relationship prematurely with significant financial consequences for the acquiring company.
Central to the assessment of the personal liability of directors and officers is the business judgement rule, which is a principle recognised, in varying forms, across most EU Member States. Under this principle, a director acts in compliance with his or her duties if, when making a business decision, he or she could reasonably assume that the decision was taken on the basis of adequate information and in the best interests of the company. The prerequisite is that no conflicts of interest exist and that the decision was made in good faith. Where these conditions are met, a so-called “safe harbour” applies so that the director is not personally liable for entrepreneurial misjudgements.
Where any of these conditions is not met, however, this protection falls away. Personal liability may arise, for example, from the acquisition of a target company despite identifiable and unaddressed compliance deficiencies, from an inadequate assessment of sanctions risks, export control requirements or FDI screening obligations during due diligence, or from continuing supplies to a counterparty despite recognisable insolvency which, depending on the applicable national insolvency and criminal law of the relevant Member State, may give rise to both civil and criminal liability for aiding and abetting wrongful trading or fraudulent trading. The acceptance of State aid without prior assessment of recovery risks under EU law may likewise constitute a breach of duty.
Directors’ and officers’ (D&O) insurance provides only limited protection in this context since deliberate breaches of duty are typically excluded from coverage, sub-limits cap the insured amount for certain categories of loss, and breaches of contractual notification obligations may result in a complete loss of cover.
Conclusion: Opportunities Only for the Well-Prepared
The European mobility ecosystem is undergoing a structural transformation of unprecedented legal complexity compounded by geopolitical disruptions and regulatory fragmentation across Member States. Legal departments and boards of directors face the task of structuring M&A activities in compliance with EU and national competition law, anticipating PPP risks, managing supply chain instabilities and deploying State aid, subsidies and rescue instruments in a legally sound manner without exposing themselves to recovery risks under EU State aid rules.
Those who underestimate this challenge risk not only transactional losses but structural competitive disadvantages in a market that shows no mercy to unprepared players.
For further information, please contact:
Janine Lanfermann-Schmid, Bird & Bird
janine.lanfermann-schmid@twobirds.com
