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UK government updates mergers regime to protect national security

Staff Writer |
Measures to update the merger system and better protect national security have been set out by Business and Energy Secretary Greg Clark.

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Those proposals include enabling the Government to intervene in mergers that raise national security concerns, even when they involve smaller businesses.

These changes are targeted at key areas, specifically companies that design or manufacture military and dual use products, and parts of the advanced technology sector.

In these areas, currently the Government can only intervene in mergers involving companies with a UK turnover of more than £70 million or where the share of UK supply increases to 25% or over.

This proposals will close these loopholes to enable greater scrutiny of foreign investment in a changing market.

In these areas, the Government will lower the threshold whereby ministers can scrutinise investment to businesses with a UK turnover of over £1 million, and remove the requirement for a merger to increase a business’s share of supply of, or over, 25%.

Government is also consulting on longer-term proposals that will allow for better scrutiny of transactions that may raise national security concerns – this could include increasing risks of espionage, sabotage, or the ability to exert inappropriate leverage.

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