Notice to exporters 2018/13: Effective 11 June 2018 New Merger and Takeover rules potentially affecting UK exporters

11 June 2018

The government has strengthened its ability to scrutinise mergers and takeovers that may raise national security concerns, through new rules that came into force from 11 June 2018.

These rules follow the publication of the ‘National Security and Infrastructure Investment Review’ Green Paper in October 2017. This review set out proposals to close gaps in our current framework in the short term, and proposals for a more comprehensive regime over the longer term.

The government has now responded to the consultation on the short-term proposals and secondary legislation came into force on 11 June 2018.

The new regulations amend the threshold tests for businesses in the military, dual-use, computing hardware and quantum technology sectors that are most likely to have implications for our security. Businesses that develop or produce goods on certain of the Strategic Export Control Lists will be covered by the amended thresholds.

Today’s changes allow ministers to intervene for public interest reasons when the target business’s UK turnover is more than £1 million, down from £70 million under the previous rules, and 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.

Action for exporters

Ensure your company is familiar with the legislation amending the share of supply testand turnover threshold and accompanying guidance.

For more information, visit www.gov.uk.

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