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UK to expand powers to block foreign takeover deals
Published Oct 14, 2019 06:59AM ET
© Reuters. UK to expand powers to block foreign takeover deals
LONDON (Reuters) - Britain plans to strengthen its powers to block or intervene in the foreign purchase of any company that could affect national security, it said on Monday.
Currently the British state can intervene in the foreign takeover of any company that plays a role in national security, the provision of media plurality or the stability of the financial system.
But setting out its new legislative agenda in a Queen's Speech on Monday, the government said it planned to be able to intervene in deals of any size in any sector that could pose a risk to national security.
Under the plan, a notification system allowing businesses to flag to government a transaction with potential security concerns will be introduced.
The government will then be able to add conditions to the transaction, block it or add sanctions for non-compliance. Companies will be able to appeal.
The move is designed to tackle national security risks wherever they arise and reflects the fact a small company with expertise in cyber could be as important as a major defense company.
Britain has one of the most open economies in the world but it does ask for a thorough examination of the impact of certain deals and it is currently reviewing acquisitions of satellite group Inmarsat (L:ISA) and defense company Cobham (L:COB).
While Prime Minister Boris Johnson does not have a majority to pass bills in parliament, the new legislation does indicate how his party will seek to govern if it holds an election later this year.
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