The government recently announced amendments to the merger control regime which extend its discretionary powers to intervene on national security or public interest grounds. These reforms aim to address concerns raised by the COVID-19 pandemic and related financial uncertainty which has heightened the "risk of hostile actors exploiting the situation" to acquire vulnerable UK businesses.
Regulatory scrutiny is an increasingly important area of focus for buyers and sellers in M&A transactions. From the outset of a deal, the parties will be keen to understand whether regulatory approval is required or recommended to be obtained prior to closing, how long it will take to obtain approval and the ability of the relevant regulator to block the transaction or otherwise impose conditions to closing that may change the commercial terms of the deal. This article looks at the UK merger control regime under the Enterprise Act 2002.
The Department for Business, Energy and Industrial Strategy recently published a green paper setting out the government's proposals to reform and strengthen its powers to scrutinise investments in critical businesses and infrastructure which could provide opportunities for foreign investors to "undertake espionage, sabotage or exert inappropriate leverage". The proposals aim to ensure that any national security issues can be considered in a clear, consistent and proportionate way.