Government introduces stricter merger and takeover rules

The Government has now updated rules to strengthen it’s powers to scrutinise mergers and takeovers that may raise national security concerns.

Today (June 11th), the Government made changes to the UK’s merger regime to recognise the growing importance of small British businesses in developing cutting edge technology products with national security applications.

In order to address changes in the market, the government amended the tests for businesses in the military, dual-use, computing hardware and quantum technology sectors that are most likely to have implications for the country’s security.

These changes allow ministers to intervene on certain grounds when the target business’ UK turnover is more than £1m, down from £70m under the previous rules.

They also remove the requirement that a merger or takeover in these sectors lead to an increase in the parties’ combined share of supply of relevant goods or services before the Government is able to intervene.

Business Minister Richard Harrington said: “These new rules ensure mergers and takeovers in key areas of the economy cannot risk our national security, while maintaining the openness to trade and investment that is underpinned by our modern Industrial Strategy.”

These changes follow a consultation launched last year to amend the Enterprise Act to reform and strengthen the Government’s powers.

The Government has published guidance for businesses to support them in adapting to these changes.