UK to seek new powers to scrutinise foreign takeovers

FILE PHOTO: Business Secretary Alok Sharma speaks during a daily briefing to update on the coronavirus disease (COVID-19) outbreak, at 10 Downing Street in London, Britain June 9, 2020. Pippa Fowles/10 Downing Street/Handout via REUTERS

LONDON (Reuters) - Britain will seek changes to the law to allow scrutiny of some foreign takeovers to ensure they do not threaten the country’s ability to tackle public health emergencies such as the coronavirus outbreak, the government said on Sunday.

Proposals for changes to the Enterprise Act will be put before parliament on Monday to allow the government to intervene if businesses such as vaccine research companies become takeover targets.

“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 government said the economic disruption caused by the pandemic meant that some critical businesses were more at risk of hostile takeovers or being sold to “malicious parties”.

Under the proposed new powers, the government would be able intervene in three sectors considered to be central to national security: artificial intelligence, cryptographic authentication technology and advanced materials.

The changes would be in addition to powers brought in two years ago to allow the government to intervene in takeovers of companies involved in military products and technologies.

“These measures will strike the right balance between the UK’s national security and resilience while maintaining our world-leading position as an attractive place to invest,” Sharma said.

“The UK is open for investment, but not for exploitation.”

Reporting by Michael Holden; Editing by David Goodman