Alok Sharma to tighten the rules to protect important UK companies from foreign takeovers

Alok Sharma to tighten the rules to protect important UK companies from foreign takeovers

The change will be presented to parliament today and proposes an amendment to the Enterprise Act which was brought in in 2002. Examples of companies that may be protected by the new legislation are those that manufacture personal protective equipment (PPE).

A release from the UK government said: “The economic disruption caused by the pandemic may mean that some businesses with critical capabilities are more susceptible to takeovers – either from outwardly hostile approaches, or financially distressed companies being sold to malicious parties.”

These changes will expand powers to scrutinise and intervene in mergers in three sectors of the economy central to national security.

It will lower the thresholds that must be met in the areas of artificial intelligence, cryptographic authentication technology and advanced materials.

Secretary of state for Business, Alok Sharma said: “To better protect the country’s resilience to COVID-19 we are taking steps now to mitigate against public health emergencies.

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Imagination Technologies, a Hertfordshire-based semi-conductor company by Canyon Bridge Partners, was bought by a Chinese company in 2017.

99 percent of the funds in that deal came from a company backed by the Chinese government.
“This is just part of an incremental process where technology is being moved out of the UK, and out of the West, and towards China,” Tom Tugendhat MP, who chairs the Foreign Affairs Select Committee, told the BBC.

These plans were first introduced by former prime minister Theresa May.

Boris Johnson has also previously outlined plans to introduce law to deal with “the buying up of UK technology now by countries that . . . may have ulterior motives.”

The EU has also previously raised concerns about foreign powers buying up European companies that are under stress.

Published at Mon, 22 Jun 2020 09:59:00 +0000