Foreign Acquirers facing greater scrutiny

Back to HubNext ArticlePrevious Article

Foreign Acquirers facing greater scrutiny

Huge increase proposed in government intervention in foreign takeovers.

New legislation has been proposed which would abolish a threshold related to transactions with potential national security implications. The current legislation, derived from the Enterprise Act 2002, means that the Government will look at deals which are seen as a threat to national security, competition or media plurality.

 

Previously there was a threshold of £70m for the value of any deal that the Government would look at with the aim of stopping any high-profile deals relating to defence contractors, aviation interests or nuclear infrastructure.


The new proposals suggest a complete removal of any thresholds in relation to national security matters which could potentially lead to a new era of government oversight of any corporate activity which could be seen to threaten UK national interests.


At present the Government reviews around one deal a year but under the new proposals it expects to get around 200 notifications of which it would expect to call in around a quarter of the these for detailed scrutiny.


Part of the reason for these changes is a realisation that a threat to national security no longer needs to come from the more traditional routes and that smaller companies which are seen as vital to the development of the UK’s financial and commercial defence systems, are also worthy of being protected.


As a firm we are seeing more and more disposals to foreign buyers and so if this new legislation does come into force, any buyers or sellers of relevant companies or assets will need to consider whether to notify civil servants of a purchase. Under the proposals, buyers and sellers will be under no obligation to notify, but face five years in jail if they are found guilty of infringing the new regime.


If you are considering selling your business to a foreign buyer this could be one of the things that you will have to start considering.


Within the PDT corporate team we act for lots of business owners selling their companies, whether to UK or overseas buyers, if you want to talk to us about selling your company please feel free to get in touch.

The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. PDT Solicitors LLP accepts no responsibility for the content of any third party website to which this webpage refers.

Related Content

PDT Solicitors Accredited and Award Winning

Get in touch with PDT Solicitors

Please leave this field blank



My topics of interest



On submitting the form you agree to be opted in to receive PDT Solicitors communications. This means PDT will send you relevant content based on the options you have selected above. We will never share or sell your data and we will always keep your information safe and secure. For more information please read our privacy statement


Submit

C

This site uses cookies.

Some of these cookies are essential, while others help us to improve your experience by providing insights into how the site is being used.

Necessary Cookies

Necessary cookies enable core functionality. The website cannot function properly without these cookies, and can only be disabled by changing your browser preferences.

Analytical Cookies

Analytical cookies help us to improve our website by collecting and reporting information on its usage.

X