Britain seeks to tighten takeover rules

'Britain has always had a proud record of being open to the world as the foremost advocate of free trade,' Clark said.

Afp October 17, 2017
union-jack-flag FILE PHOTO

LONDON: Britain on Tuesday unveiled proposals that would permit it to have a greater say in mergers and takeovers that spark national security concerns.

"Today's proposals include enabling the government to intervene in mergers that raise national security concerns, even when they involve smaller businesses," the government said in a statement.

"These changes are targeted at key areas, specifically companies that design or manufacture military and dual use products, and parts of the advanced technology sector."

The government is currently only permitted to intervene in mergers involving companies with a British turnover of more than £70 million ($93 million, 79 million euros), or where the British share of supply hits 25 percent or more.

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Tuesday's plans will lower the threshold to a UK turnover of less than £1.0 million, and remove the 25-percent requirement entirely. "Today's proposals will close these loopholes to enable greater scrutiny of foreign investment in a changing market," the government noted.

Business and Energy Secretary Greg Clark stressed however that Britain would remain a major advocate of free trade, amid looming Brexit.

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"Britain has and always has had a proud record of being open to the world as the foremost advocate of free trade," Clark said. "It is right that every so often the government reviews its mergers regime to close loopholes where they arise and this is what these proposals do in the area of national security.

"No part of the economy is off-limits to foreign investment and the UK will continue to be a vociferous advocate for free trade and a magnet for global talent."

In addition, the government will consult upon longer-term proposals that will allow for better scrutiny of transactions that may raise national security concerns. That could include increasing risks of espionage, sabotage, or the ability to exert inappropriate leverage.

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