Ministers to gain new powers to block business takeovers on national security grounds
2 min read
Ministers will be handed the power to block or unwind foreign takeovers and mergers if they are thought to pose a risk to national security, under fresh proposals.
In a white paper to be unveiled today, Business Secretary Greg Clark will reveal plans to extend oversight of mergers and takeovers to a broader range of industries and smaller businesses.
The proposals would boost the Government’s role across the economy, given it can currently only intercept corporate takeovers where there is a concern around competition.
While buyers and sellers are under no obligation to tell civil servants of a purchase under the new rules, they could face five years in prison if found guilty of breaching the regime.
The Department for Business, Energy & Industrial Strategy (BEIS) expects civil servants to consider around 200 cases a year, leading to about 100 formal reviews of which up to 50 are likely to be “called in”.
It means companies could see conditions imposed for a sale to progress, or a sale could be blocked altogether.
Ministers will also abolish the threshold of annual revenues needed before deals could be reviewed, which until recently stood at those generating over £70m.
Under rules that came into force last month, ministers can intervene in the military, computing hardware, quantum technology and so-called dual-use industries if the target company generates revenue of at least £1m.
The industry minister Richard Harrington said last month: “These new rules ensure mergers and takeovers in key areas of the economy cannot risk our national security, while maintaining the openness to trade and investment that is underpinned by our modern industrial strategy.”
PoliticsHome Newsletters
PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe
