U.K. Revises Merger Rules to Widen `National Security' Test
(Bloomberg) -- The U.K. government revised merger and takeover rules, to make it easier to block takeovers of companies when officials are concerned about risks to national security.
The measures that take effect Monday apply to businesses that make technology with military or dual-use applications, including computer hardware. The changes will help keep the U.K. safe and sustain its reputation as an “open, trading nation,” the Department for Business, Energy and Industrial Strategy said in a statement. The changes were proposed last year.
The change lets ministers intervene on certain grounds if the target U.K. businesses’ annual revenue exceeds one million pounds ($1.3 million), down from 70 million. The new rules also scrap a requirement that a merger needed to increase the combined firms’ market share to 25 percent before a review is started.
“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,” Business Minister Richard Harrington said in the statement.
The rules introduced Monday also change the thresholds at which the Competition and Markets Authority can scrutinize mergers, but neither the government nor the CMA expect the changes to change the way mergers are assessed on competition grounds.
Later this year, the government will propose broader changes in a White paper, the department said. An impact assessment of the national security and infrastructure investment review was published in September, followed by a Green Paper on Oct. 17.
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