Government makes changes to takeover rules
The Government has updated the rules surrounding takeovers to coexist with new technology developments.
Business Minister Richard Harrington said the rules will strengthen the Government’s powers to scrutinise takeovers that may raise national security concerns in specific areas of the economy.
The changes will apply to businesses developing military technology, computing hardware and quantum technology.
Under current rules, the Government can only intervene in mergers when they meet certain tests related to the target company’s turnover or where the merger may cause an unfair monopoly.
The tests will now be changed to account for takeovers and mergers which could create a national security risk.
This includes removing the requirement for a merger to lead to an increase in the share of supply, as well as lowering the test for ministerial intervention in relation to the target business’s turnover to over £1 million, down from £70 million.
Business Minister Richard Harrington said: “Around 75,000 new jobs were created in the UK last year thanks to foreign investment. However, our economy can only thrive if our national security is protected, so it is right that we keep our powers of intervention under review to ensure the rules keep pace with innovation.
“These new measures will allow us to ensure that takeovers in key areas of the economy cannot risk the UK’s national security whilst maintaining our position as one of the most open and modern economies in the world.”