Government closes business merger ‘loopholes’ to tackle security threats
Written by News on 17/10/2017
The Government has increased its powers to intervene in mergers that raise national security concerns.
Military product-makers and advanced technology firms will be targeted as "loopholes" which previously prevented scrutiny are closed.
Ministers will now be able to scrutinise takeover companies with a turnover of more than £1m, down from the current £70m threshold.
And a merger will no longer need to increase a business’s share of UK supply to 25% or over.
Business secretary Greg Clarke told Sky News the changes needed to reflect an economy where "many smaller suppliers can have a big effect on our systems".
He said being able to block or put conditions on smaller infrastructure company mergers would stop them "slipping through the net".
"These are the powers that all of our principle allies and industrial competitors have – the US, France, Germany, Australia – this is pretty standard," he said.
"It’s not about blocking all overseas investment, quite the opposite. It’s about making sure we have the confidence to attract investment knowing that we can make sure there is never any threat to national security."
Nigel Parr, a competition partner at law firm Ashurst, said it was a "small step" for the Government.
He added: "The proposals announced today are much more modest than some of the earlier indications suggested they would be, and sit within the existing mergers regime rather than within a newly created foreign investment body, such as Committee on Foreign Investment in the US."
(c) Sky News 2017: Government closes business merger ‘loopholes’ to tackle security threats
