Lately, the British media reported that the regulators are about to restrict control over foreign investments. The new regulation policy brings a right for authorities to intervene in mergers in the UK in order to protect the public interest and fight emergencies that happen due to the coronavirus crisis. As this post tells about the key nuances of the updated regulation, it will surely be useful for those planning to start a business in Great Britain.
Innovation in foreign investment regulation
Similar to other countries in Europe, Great Britain is concerned about foreign investments that could be a threat to the British economy due to the consequences of the coronavirus.
Because of this situation, the regulators added a new rule to the Enterprise Act that enables them to examine mergers in the United Kingdom. This innovation is mainly made to make sure that the country’s ability to withstand emergencies like COVID without being disrupted by these transactions.
In certain industries the intervention level used to be lower, but will now rise:
- Crypto authentication
- Artificial intelligence.
The regulation update is especially applicable to mergers and acquisitions in the sphere of pharmaceutical companies in regard of vaccine research and manufacturers of personal protective equipment. In case a company like this was to be a target of a takeover deal, the British regulators would intervene.
Great Britain is famous for being very welcoming toward foreign investment in high-tech industries. Yet, right now the British government is being cautious about foreign investors acquiring technologies that could be crucial for national security and public welfare. These are things that could lead to losing strategic advantage.
If you are looking to perform an M&A transaction in the United Kingdom, it can be useful to take into account possible implementation of even stricter innovations that regulate foreign investment there. You can contact our specialists in COREDO to get answers about all inquiries concerning this issue.