On Monday (22 June 2020), changes to the Enterprise Act 2002 merger control thresholds were laid before the UK Parliament relating to (i) UK businesses critical to combating COVID-19 and future public health emergencies, and (ii) certain UK companies and technologies perceived as being key to national security.
These changes are being implemented in advance of the forthcoming National Security and Investment ("NS&I") Bill, which is anticipated to be published shortly and will establish a standalone UK foreign investment review regime, similar to a US CFIUS-style regime.
These changes also follow previous amendments made in 2018, under which the UK Government materially reduced the jurisdictional thresholds for strategic businesses engaged in activities involving military or dual-use goods, computer processing units or quantum technology. The new amendments are intended to mitigate perceived short-terms risks, and safeguard the national security and resilience of the UK, ahead of more comprehensive powers to be introduced in the NS&I Bill.
Check out our latest client alert for more information.
The UK developments reflect a broader global trend whereby governments across the world are looking to protect against opportunistic acquisitions of strategic businesses and assets as we emerge from the COVID-19 crisis.
The key challenge for business will be the broader categories of activities now covered by the reduced intervention thresholds under the Enterprise Act. With ever-increasing digitalisation, artificial intelligence and cryptography now forming a part of many industries, the potential impact of these latest reforms is far-reaching across UK businesses.