Updated rules put in place to strengthen the Government’s powers to scrutinise mergers and takeovers that may raise national security concerns have come into force. The move recognises the growing importance of British businesses in developing cutting-edge technology products with national security applications.
In order to address changes in the market, the Government amended the threshold tests for businesses in the military, dual-use, computing hardware and quantum technology sectors that are most likely to have implications for national security.
Today’s changes allow ministers to intervene on certain grounds when a given target business’ UK turnover is more than £1 million. This is down from £70 million under the previous rules. The alterations also remove the requirement that a merger or takeover in these sectors lead to an increase in the parties’ combined share of supply of relevant goods or services before the Government is able to intervene.
Business Minister Richard Harrington said: “These new rules ensure that mergers and takeovers in key areas of the economy cannot risk our national security, while also maintaining the openness to trade and investment that’s underpinned by the Government’s modern Industrial Strategy.”
The changes follow in the wake of a consultation launched last year to amend the Enterprise Act and both reform and strengthen the Government’s powers. Today’s new rules are the first step, with broader changes to be announced in a White Paper later on this year.