Government to amend UK merger thresholds for certain transactions impacting national security

Government to amend UK merger thresholds for certain transactions impacting national security

In 15 March 2018, the UK government published a draft statutory instrument which (subject to approval by Parliament)  will amend the share of supply notification threshold for the UK merger control regime (section 23 of the Enterprise Act 2002) for certain sectors impacting national security (namely the development or production of items for military or military and civilian use, quantum technology and computing hardware), so that the threshold can be met solely by the activities of the target.  The government has also announced that it intends to reduce the turnover threshold to £1m for these sectors if parliament accepts the change to the share of supply threshold.  The CMA has launched a consultation on draft guidance on the proposed changes. The purpose of these changes is to enable the Secretary of State to intervene in mergers in these sectors which might give rise to national security implications.
BackgroundIn October 2017, the Department for Business, Energy & Industrial Strategy (BEIS) published its consultation paper on its National Security and Infrastructure Investment Review in which it proposed enhancing the government’s ability to intervene in mergers that raise national security issues by amending the Enterprise Act 2002 by lowering the turnover threshold at which ministers can scrutinise investment and removing the requirement for a merger to increase a business’ share of supply of, or over, 25% (see further Government proposes to increase powers to intervene in mergers which raise national security concerns, 

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