Government to scrutinise takeovers of companies responding to coronavirus (COVID-19)

Government to scrutinise takeovers of companies responding to coronavirus (COVID-19)

The Department for Business, Energy & Industrial Strategy has announced that changes to the Enterprise Act 2002, which will permit the government to scrutinise ‘certain foreign takeovers’ in order to determine ‘they do not threaten’ the UK’s ability to combat public health emergencies including the coronavirus (COVD-19) outbreak, will be laid before Parliament on Monday 22 June 2020. The new public health emergency statutory instrument will enable the government to take action if a business that is directly involved in a pandemic response becomes the target of a takeover. The proposed changes will also, subject to approval from both houses, increase the government’s powers to scrutinise and intervene in mergers in artificial intelligence, cryptographic authentication technology and advanced materials, sectors deemed essential to national security.

Secretary of State for Business, Alok Sharma, said:

‘To better protect the country’s resilience to Covid-19 we are taking steps now to mitigate against public health emergencies.

These measures will strike the right balance between the UK’s national security and resilience while maintaining our world-leading position as an attractive place to invest - the UK is open for investment, but not for exploitation.’

The Enterprise Act 2002 will now allow the government to intervene in mergers and takeovers on considerations of public health emergencies as well as national security, media plurality and financial stability.

Source: New protections for UK businesses key to national security and fight against coronavirus

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