The British government has revised merger and takeover rules, widening its ability to block takeovers that pose national security risks.
The rules, effective June 11, affect businesses that manufacture technology and hardware suitable for military or dual-use, Bloomberg News and Sky News reported the same day. The new rules now allow the British government to intervene in a merger where the target business' annual revenue in the U.K. is more than £1 million, down from £70 million.
A requirement that the government could only intervene if a merger would raise the combined firm's market share to 25% was also removed. At least 91% of deals in the military and dual-use, quantum technology and multi-purpose computing hardware sectors will now be subject to government scrutiny under the new rules, up from 35% previously, City A.M. wrote, citing law firm Baker McKenzie.
The rules, which were initially proposed in October 2017, also change the thresholds for the Competition and Markets Authority to review mergers on competition concerns. Samantha Mobley, London head of competition and trade at Baker McKenzie, reportedly said the new rules will have a significant impact on the CMA's resources at a time when it is "already predicting that its mergers workload will increase by 50% as a result of Brexit."
