The government is set to introduce new measures to protect UK businesses critical to combating coronavirus from foreign takeovers.
The Department for Business, Energy and Industrial Strategy (BEIS) today set it will set out changes to the 2002 Enterprise Act tomorrow to allow the government to scrutinise foreign takeovers to ensure they do not threaten Britain’s ability to combat public health emergencies.
“These powers will send an important signal to those seeking to take advantage of those struggling as a result of the pandemic that the UK government is prepared to act where necessary to protect our national security,” business secretary Alok Sharma said in a statement.
“The UK is open for investment, but not for exploitation,” he added.
The new powers will enable the government to intervene if a business that is directly involved in a pandemic response — for example, a vaccine research company or personal protective equipment (PPE) manufacturer —becomes the target of a takeover.
Changes to the Enterprise Act, which allows the government to intervene in mergers that threaten national security, will come into effect on Tuesday.
It comes amid mounting concerns that economic disruption caused by the coronavirus crisis may leave some businesses vulnerable to foreign takeovers.
MPs this week expressed outrage over an attempted coup by a China-backed company at Information technologies — a UK firm that produces computer chips for Apple — which would have handed Beijing a strategically important UK business.
In May, Prime Minister Boris Johnson said MPs were “right to be concerned” about the buying up of UK technology by countries that had “ulterior motives”.
Writing in today’s Mail on Sunday, Sharma said the UK “must not be blind to the risks hostile actors could pose”, adding that he was “expanding the government’s powers to intervene” in potentially dodgy mergers.
Currently, the business secretary can intervene only if the targeted business has a UK turnover of more than £1m — a figure that was cut from £70m in 2018.
In April, the EU raised similar worries that foreign investors may attempt malicious takeovers of European companies under stress. The EU said overseas businesses may try to swoop “in order to take control of key technologies, infrastructure or expertise”, adding that this “raises concerns as regards security”.