The UK Government has tabled an amendment to the National Security and Investment Bill (NSIB), which would reduce the number of transactions that are required to be mandatorily notified.
The Secretary of State for Business, Energy & Industrial Strategy (BEIS), Kwasi Kwarteng, is behind the amendment in response to pressure from the business community, according to a report in The Sunday Times.
The amendment would see the percentage threshold, at which businesses must notify the Investment Security Unit of BEIS of their deals, increase from 15% to 25%. This would bring the UK’s incoming regime in line with the Committee on Foreign Investment’s regime in the United States. Under the amendment, the Secretary of State will still retain the power to call in and review acquisitions where a bidder is proposing to buy less than a 25% stake in a qualifying entity if the Minister reasonably suspects that the transaction amounts to the acquisition of “material influence”. That power would be available to the Secretary of State for up to five years after an acquisition has taken place.
A government spokesperson said the following in relation to this development:
“The National Security and Investment Bill will strengthen the UK’s ability to investigate and intervene in mergers, acquisitions and other types of deals that could threaten our national security. The overwhelming majority of transactions will be unaffected by these new powers.
“This change will ensure the new regime is proportionate and as transparent as possible without reducing the Government’s intervention powers.”
We welcome this amendment and, having adjusted its position on this point, the Government would be well advised to similarly change its approach to the inclusion of intragroup transfers within the scope of the NSIB, as previously stated here and here.