It has recently been reported in the media that the United Kingdom intends to take stronger measures to control foreign investment. This intention includes, inter alia, the possibility for the authorities to intervene in mergers in the United Kingdom on the basis of protecting the public interest and combating emergencies caused by the coronavirus pandemic. If you are planning to start a business in England, you may find this blog post useful as it presents the main nuances of the innovation.
Updated regulation of foreign investment in the UK
Like many European countries, the UK has expressed concern that the economic consequences of the coronavirus could contribute to foreign investment that threatens Britain.
In this regard, a new basis has been added to the Enterprise Act, giving regulators the power to further scrutinize mergers in the UK. The purpose of the innovation is to ensure that these transactions do not jeopardize the country's ability to withstand the effects of COVID-19 and similar emergencies.
The list of areas with lower intervention thresholds is expected to be expanded to include areas:
- artificial intelligence;
- crypto authentication.
The innovation is particularly relevant to mergers and acquisitions of pharmaceutical companies (vaccine research or personal protective equipment manufacturers)
The new powers will allow regulators to intervene if such a company is the target of a takeover deal in Britain.
The UK welcomes foreign investment in high-tech industries and remains one of the most open countries for foreign investors. However, the government is taking precautionary measures in case foreigners acquire technologies important for national security and public welfare in order to gain a strategic advantage.
If you are planning to conduct an M&A transaction in the UK, it is important to keep in mind that the country is expected to implement more extensive reforms and tighten measures to regulate foreign investment in the United Kingdom. If you have any queries on this topic, do not hesitate to contact our specialists in a way convenient for you and make an appointment for a personal consultation.