The Government is set to unveil new legislation that will enable ministers to block firms from ‘hostile states’ from completing takeovers of UK companies.
The National Security and Investment Bill will make it mandatory for acquisitions and mergers involving firms of 17 sectors that are classified as ‘of strategic importance’ to be notified to officials.
Under the legislation, the Government will have the power to scrutinise the acquisition of assets and intellectual property (IP), as well as takeovers of the companies as a whole.
Investments are set to be screened within 30 days, replacing the current system which works on a case-by-case basis, which the Government states will help to speed up the acquisition process.
Alok Sharma, Business Secretary, said: “The UK remains one of the most attractive investment destinations in the world and we want to keep it that way. But hostile actors should be in no doubt – there is no back door into the UK.
“This Bill will mean that we can continue to welcome job-creating investment to our shores, while shutting out those who could threaten the safety of the British people.”
Deals which ministers decide could present significant issues for the UK can be blocked if the threat to national security is substantial, or have conditions imposed upon them following a complete security assessment.
The new rules represent the most significant changes to the UK mergers and acquisitions regime in decades and it brings the UK in line with similar frameworks that have been introduced in Australia, France, Italy and the US.